TW illustration by Jenn Martins
TW illustration by Jenn Martins
A most unusual year leads to a most unusual Power List.
By Jerry Limone and Arnie Weissmann
June 21, 2021
We made an early call to freeze last year’s Power List rankings for the current year.
With the exception only of 2020 merger and acquisition activity among Power List agencies, the rankings you’ll see on this year’s list are otherwise the same as was compiled by Travel Weekly last June. That list was based on gross travel sales in 2019.
Read the complete Power List, including each agency’s pandemic-era decisions and outlook on travel.
Why freeze the rankings? We knew 2020 reported sales would be anomalous, to say the least. We wondered how many agencies would even be able to meet the minimum sales threshold — $100 million — to be considered for inclusion.
And, frankly, when we surveyed a handful of Power List executives by phone in February about participating this year, they indicated they would, but that they would not want to share their exact sales numbers, the criteria upon which we traditionally determine the rankings.
They did agree, however, to voluntarily report the percentage of their sales decline within five points, along with information about how their business was impacted over this past year, how they reacted to the drop in business and what they see as they move forward.
We were delighted they were willing to provide this intelligence to share with the rest of the industry as we all plot a path toward recovery. The candor and generosity of spirit reflected in these responses was impressive and inspiring, and we’re very grateful to all who participated.
What follows is a summary of what we learned.
Leisure leads the recovery
Because Power List agencies report their mix of leisure versus business sales, it became immediately clear that agencies with a higher percentage of leisure travel were more upbeat — ebullient, even — moving into recovery. Here’s what some agencies that have sizable leisure business had to say:
• No. 34 OutsideAgents.com (94% leisure, 2% business) anticipates a “tidal wave” of sales. It said March 2021 was the best month in the company’s history and that April was projected to be even better.
• No. 39 host agency KHM Travel Group expects new bookings in 2022 will be at or above 2019 levels.
• No. 23 Cruise Planners says the outlook for 2022 is “tremendous,” with “forward-looking departures for 2022 close to 50% higher than 2019, which was a strong year.” Cruise Planners considers 2021 to be a transition year because cruise lines won’t have full fleets deployed.
• For 2022 bookings and beyond, No. 29 Avoya says money spent per booking is two times historical norms.
• Further illustrating what travelers are willing to spend on leisure, No. 7 Internova says leisure clients are inquiring about bucket-list trips and other travel options that are longer than the typical vacations. No. 35 Valerie Wilson Travel (purchased in 2021 by No. 13 Frosch) said travel planning has especially picked up for milestones such as birthdays, anniversaries and graduations.
• Similarly, No. 12 AAA says travelers are looking for experiences, and No. 17 World Travel said long quarantines have “inspired clients to take vacations.”
• And No. 14 Ovation Travel Group presents the distinction of corporate (84% of sales) versus leisure (13% of sales). The agency expects this year’s summer vacation travel to be at 50% of 2019 levels. On the other hand, business travel volume is expected to be down 84% from 2019 in the second half of 2021.
When is business travel coming back? It’s complicated.
While a few agencies on the Power List have cited pent-up demand for business travel, there are several factors they believe are holding them back from recovery. But they also indicated that they have shifted how they view the services they provide. The corporate model has evolved in response to the pandemic.
• No. 4 BCD Travel says there is an increased focus on traveler care, risk management and security, with corporations wanting to explore better ways to regulate where employees are traveling.
• BCD also noted that the Covid-related cleanliness and health procedures that airlines have implemented may add to trip length and that corporations will need to take this into account when calculating the return on investment for prospective business trips.
• No. 6 Flight Centre Travel Group, Americas also cited a focus on duty of traveler care.
• No. 11 Corporate Travel Management is trying to get ahead of this trend by encouraging clients to consider traveler well-being and risk mitigation when formulating their travel programs going forward.
• No. 19 ATG says clients will increasingly require pre-trip approvals to manage travel budgets and ensure traveler safety. ATG says travel management companies must step up and help clients meet this need.
• No. 43 Uniglobe Travel Partners says clients are analyzing the purpose of each prospective trip, determining if a virtual meeting could fulfill company objectives. The agency added that small and midsize companies may be less risk-averse than large ones, which suggests that the small-company road warrior may become even more differentiated from traveling employees who work for large corporations.
• In one of the bits of good news from Power Listers regarding business travel, No. 45 Conlin Travel said there is “much talk about road warriors being excited to resume business travel.” No. 41 AmTrav says there’s pent-up demand for in-person connection.
• However, most of the talk about business travel appears to center around “slow and steady” recovery, unlike the explosion of pent-up leisure demand. No. 25 Fox World Travel and No. 5 CWT don’t anticipate a robust recovery until 2023. No. 37 Kintetsu International Express said a full recovery is “far away.”
• No. 21 Christopherson Andavo Travel went so far as to say that the pandemic “transformed business forever.” The challenge, it believes, is for agencies to find the correct blend of digital and human service, and the TMCs that get it right will grow faster than others.
• No. 33 Atlas Travel & Technology Group says it is still seeking “to establish a baseline for the new normal.”
Mergers and acquisition activity has been robust during the pandemic, reflecting both cash flow issues and the belief, widely held in the corporate travel world, that technology deployed at scale is critical to acquiring new business. As No. 48 Executive Travel reported, “There’s tremendous opportunity, as many competitors have or will go out of business or be acquired.”
• In May 2021, No. 3 American Express Global Business Travel agreed to acquire No. 1 Expedia’s corporate travel division. Amex GBT also acquired No. 14 Ovation Travel Group in January 2021.
• No. 11 Corporate Travel Management acquired Nebraska-based Travel and Transport, which had been No. 13 on last year’s list, in September 2020.
• No. 13 Frosch acquired No. 35 Valerie Wilson Travel in May 2021.
• In a move that reflects the faster recovery of leisure travel over business travel, Conlin Travel said it has expanded leisure operations through several acquisitions.
The search for new revenue streams
With most air travel at a standstill, agencies had to think outside the box in order to generate at least some revenue in 2020. Some examples of new revenue streams:
• No. 49 World Travel Service refocused sales on car and homestay rentals.
• No. 44 Travelink shifted business to small groups that wished to continue with travel plans in the U.S., Mexico and the Caribbean
• No. 36 TAG grew its production travel division (film and media) and won new business.
• Tapping into the wellness trend, Valerie Wilson Travel (VWT) formed a marketing partnership with Trilogy Spa Holdings to showcase Trilogy’s wellness offerings to VWT clients. VWT also launched VWT Associate Access, a training and mentoring program for budding travel entrepreneurs.
• OutsideAgents.com said it quickly shifted from cruise sales to domestic vacation rentals and all-inclusives when the pandemic hit. The company said “our cruise heavy hitters switched products and came on strong.”
• Along the same lines, No. 16 World Travel Holdings’ Villas of Distinction brand added more than 300 villas in U.S. and Canada due to heightened interest in roadtrips and staycations.
• With transactions drying up, ATG said it inked deals for several billable projects with corporate clients, enabling the meetings- and events-planning agency to continue to maintain a close working relationship with those clients.
• No. 26 Key Travel launched a booking portal for its university clients in the U.K., facilitating the travel of overseas students.
• With the absence of travel volume, No. 10 Fareportal said it formed a “laser focus on marketing high-margin products in high-margin channels.”
Technology updates and innovation
Many Power Listers invested in technology in 2020. At the pandemic’s outset in March 2020, their tech goals were immediate and urgent in response to the crisis.
Initially, agencies focused on transitioning nearly all employees to remote work environments, which required updating call center and computer systems. Some companies had less work to do because widespread virtual work environments had already been established with remote home agents.
Then came another technological hurdle: how to manage hundreds of thousands of canceled flight reservations and banked airline tickets. Even the TMCs that already had a solution in place for managing unused tickets had to upgrade their systems to handle the unprecedented volume of cancellations. A common upgrade was the institution of a self-service option.
For leisure agencies, the challenge was not only tracking canceled cruise reservations through technology but persuading customers to opt for future cruise credits over refunds. The success of this endeavor was critical to the bottom lines of their companies — and those of the cruise lines. Host agencies Avoya and OutsideAgents.com and agency franchise Cruise Planners highlighted their efforts to promote cruise credits in their messaging to customers.
Other technology projects of note:
• No. 22 Adelman Travel launched a self-service tool for pre-trip approval to address high-risk locations.
• CWT introduced a search tool giving travelers access to information on applicable restrictions, procedures and travel requirements based on a traveler’s trip origin, destination, travel dates and nationality.
• No. 37 Gant Travel said it “ripped out 80% of systems to take automation to a new level.”
The Paycheck Protection Program and downsizing
The responses from large, but not mega, agencies — those ranking in the 20s and below — often mentioned that they successfully secured PPP funds from the federal government. As we move even further down the list, we see agencies that successfully applied for two rounds of PPP funding.
Still, most agencies laid off at least some employees for a period of time. World Travel and KHM Travel were exceptions, managing to avoid letting any employees go.
No. 21 Christopherson Andavo Travel reported painful but necessary decisions to do furloughs, layoffs and pay cuts in the early spring of 2020. The agency called it “the most difficult decision in 30 years of owning the business,” but a decision that nonetheless had to be made to protect the company. Christopherson Andavo laid off approximately 50% of staff. The agency said that “early, decisive action” was a better option than asking employees to face continual rounds of layoffs, or what it characterized as “death by 1,000 cuts.”
Several companies, among them AAA, Internova, Cruise Planners, Uniglobe Travel Partners and Executive Travel, mentioned that they used the downtime to plan training for their travel advisors, positioning them for greater success when travel resumed.
When the history of the pandemic is written, its impact on the travel industry will be noted as among the most extreme of any economic sector. And the industry’s response may well be studied in crisis management courses for decades to come.
Of course, the crisis has not run its course. We hope that the sum of the detailed experiences of these companies, the largest and most successful in travel, can help other companies still struggling to find their way to more stability.
Complete company-by-company responses can be found on our Power List page.
A previous version of this report incorrectly stated that World Travel Holdings had added Villas of Distinction as a preferred supplier; Villas of Distinction is a World Travel Holdings brand.
A previous version of this report incorrectly gave examples of companies that had avoided layoffs. World Travel and KHM were companies that retained all staff.