Many travel agencies are going nowhere in recession

Friday, March 20, 2009

                               

Baltimore Business Journal

                         

The travel agency industry, seeing a steep drop in leisure and corporate travel, is hurting badly in the recession. It’s the latest blow to an industry that has struggled for the past decade to hold onto sales. The erosion has been caused by people booking their own travel online, a resort and cruise industry that often deals directly with travelers, and the lingering effects of the Sept. 11, 2001 terrorist attacks.

To make things worse, cruise operators, resorts, hotels and airlines are offering bigger discounts to woo travelers. Agents, who make commissions based on the price of the trip, are earning less and scrambling to book more trips.

“Firms are having to adjust quickly to survive,” said Scott Koepf, president of the National Association for Career Travel Agents.

He said the industry may see more consolidation and more firms going from salaried employees to home-based agents working on commission.

Sales at Liberty Travel, a New Jersey-based travel agency, dropped by nearly 20 percent to 25 percent late last year. To cope with a slowdown in leisure travel, the firm closed offices in downtown Baltimore, Lutherville, Gaithersburg and Laurel and laid off 18 travel agents in the area. The cuts were part of a companywide layoff of more than 100 travel agents and closure of 31 offices.

“The economy forced our hand, and we had to make tough decisions,” said Sue Brennan, director of human resources for Liberty Travel.

Safe Harbors Travel Agency, an Owings Mills firm that books corporate travel, was quick to make changes to survive the slowdown in business travel.

Businesses canceled some out-of-town trips late last year and slashed travel budgets, said Jay Ellenby, president of the firm. Some clients even told Ellenby not to expect their business again until 2010.

Safe Harbors’ sales were down nearly 18 percent for the first few months of the year. The firm has laid off three of its 27 travel agents between. It also moved out of Canton and into cheaper space in Owings Mills last year.

Still, Ellenby said he is optimistic the company can weather the bad economy.