It’s undeniable that demand for travel nurses has fallen since its pandemic peak, when hospitals paid top dollar for temporary staff as patient numbers soared and swaths of workers fell ill.
Now, though, the numbers tell a different story.
After growing more than sixfold from $6.5 billion in 2019 to $42.7 billion in 2022, the travel nursing market shrank 40% to $25.6 billion in 2023, according to a June report by research and advisory firm Staffing Industry Analysts (SIA).
Throughout 2023, headline after headline reported downsizing at companies built for travel nurses, and pay shrank, with the average bill rate down from $133.47 in 2022 to $106.78, SIA found. The question arises: What does travel nursing’s future look like?
Staffing agencies and healthcare experts say the industry was growing even before the pandemic, and though it has fallen from pandemic levels, it’s worth more than it was before. They predict travel nursing has a strong future in a normal market.
Still needed. Travel nursing is a crucial part of healthcare because hospitals will always need contract labor when employees are out sick or on vacation, Akin Demehin, senior director of quality and patient safety policy at trade group the American Hospital Association, told Healthcare Brew.
“[Contract labor] is still a part of the mix, and to a certain extent, it always will be,” Demehin said.
Travel nursing is also a valuable tool for combating the nursing shortage, Kimberly Martini, division president of Nurse Staffing Solutions at staffing agency AMN Healthcare, told Healthcare Brew. The shortage, which was already an issue before the pandemic hit, is projected to intensify in the next decade as more nurses reach retirement age and the number of seniors needing care grows, according to the American Association of Colleges of Nursing.
“[We’re] still seeing a very healthy, strong market, and definitely a need for travel nurses. If you think about the macro drivers of what we see in the market, that hasn’t changed,” Martini said.
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SIA’s June report estimates, based on current trends in the nursing supply, hospital growth, and the economy in the US, that the travel nursing industry will be worth about $19.5 billion in 2025 —a far cry from its peak, but a huge increase since 2019.
Market corrects itself. At the same time, the demand for travel nurses has started to cool. Hospitals are hiring full-time staff because it’s valuable to have employees who know the community and workplace culture—not to mention more cost effective, Demehin said.
“Hospitals, over the past several years, have really been working in concerted fashion to shore up their workforce, to double down on the recruitment and retention efforts,” Demehin said.
The number of healthcare employees fell by 1.6 million between February and April 2020, according to a March 2024 KFF and nonprofit Peterson Center on Healthcare analysis, contributing to a travel nursing boom. But hospitals have since gone on hiring sprees, the KFF–Peterson analysis found, with healthcare employment nearing pre-pandemic projections in February 2024. As hospital employees grew in numbers, the travel nurse industry has shrunk, SIA found.
Take Altamonte Springs, Florida-based AdventHealth, which added 2,333 new positions across its East Central and Central Florida divisions. The added positions (and $100 million in nurse raises and bonuses) helped the Central Florida division reduce its reliance on travel nurses in three Greater Orlando counties by 98% since its pandemic peak, according to data provided by spokesperson Caroline Glenn.
Agencies streamline. As hospitals reduce their traveler pools, some agencies have had to downsize, Kenny Kadar, president of the nonprofit National Association of Travel Healthcare Organizations and president and owner of nurse staffing agency Coast Medical Service, told Healthcare Brew.
But he said layoffs at staffing agencies are also an opportunity to eliminate redundant positions for a “smoother process.”
“I’d like to think that the companies are getting stronger through [downsizing] and really streamlining their ability to provide quality clinicians at a scalable and cost-effective fashion,” he said.