Ovation Travel Group has survived the terrorist attacks of 9/11, the 2002-04 SARS outbreak, the 2009-10 swine flu pandemic, the 2015-16 Zika virus outbreak, multiple Ebola virus outbreaks and three U.S. recessions.
That experience and some important changes in 2019 lead executive vice president Michael Steiner to believe the company will weather the coronavirus and ensuing economic downturn, as well.
New York-based Ovation, No. 15 on the 2020 Power List, finished strong in 2019. The direct seller of travel products moved its headquarters to midtown Manhattan after 20 years in Union Square. It finished its first full year in its new London office, which handles entertainment, music touring and media travel as well as luxury leisure and corporate travel. It also opened a new office in Dallas, where it held nearly 700 meetings and training sessions last year.
As a result, it brought in more than $115 million in new travel spending from corporate clients and increased luxury leisure sales 40% from 2018. Total sales increased from $1.4 billion in 2018 to $1.6 billion last year, with ARC sales increasing from $955 million to $1.1 billion during that same span.
"We've been at this for 35 years, and there have been pullbacks," Steiner said. "But each time, we've come out stronger on the other side."
During previous downturns, Ovation has focused on implementing new technology and training staff in its use. During the coronavirus pandemic, it has meant focusing its efforts on artificial intelligence and pretrip approval technology.
It's also using the lull in travel to listen to public officials, check in with clients and plan for the steps ahead. So far, Ovation has qualified for the Payroll Protection Program grants and loans and applied for benefits under the Cares Act.
It has also done "the very difficult tasks" of cost reductions, including furloughing workers and cutting other expenses. Though Steiner noted it's a fluid process that will depend largely on the pandemic's timetable, he said Ovation is well situated to face its current challenges.
"Even though we made significant investments in New York and London and Dallas, roughly 75% of our workforce was virtual to begin with," Steiner said. "So it wasn't a big stretch for us to then take the rest of the 25% or so virtual."
All of the above, Steiner said, will also make it easier to address the future once travel returns. During previous crises, Ovation found that business and leisure travel tended to come roaring back quickly.
"Especially in the financial services area investment banking, private equity, hedge funds there's a tremendous amount of pent-up demand," Steiner said. "These folks who are deal-makers need to get on the road to make their deals, close their deals and visit portfolio companies. That isn't virtual work, that's boots-on-the-ground corporate travel."
In Steiner's view, it's better for companies to have staff all together. At Ovation, he said, it makes them more productive and more willing to collaborate and brainstorm. He said it's why he believes that, long term, conferencing technology won't replace business travel.
"I'm speaking to a lot of clients through this process, and what I'm hearing is that while the technology has been effective for having meetings, they are missing a little bit in terms of productivity and socialization," Steiner said.
Meanwhile, leisure customers face a post-coronavirus dilemma of their own. As travelers who canceled airfare, hotels, meals and events struggle to piece it all back together again, Steiner said he sees an opportunity for Ovation and other firms to pitch in.
He said travel providers can aggregate information, provide counsel and combine different aspects of a trip. It not only serves the client, but it gives a firm like Ovation a way to diversify its offerings and strengthen its position in the travel industry.
"The travel industry, like many industries, is going through a fair amount of challenges right now," Steiner said. "We've gone through them before I don't know if it was of this size and pace but we'll get through it and come out on the other side."