There was last week’s Wall Street meltdown. And then there was the travel agency slowdown.
Robert Haynie, owner of Haynie Travel, an American Express rep agency in Evansville, Ind., echoed several of his counterparts when he referred to “a pervasive wait-and-see attitude about the economy and the election.”
Therefore, he has seen a booking slowdown but no cancellations, “perhaps because of supplier penalty provisions,” he suggested.
Agents contacted on Oct. 1, two days after the stock market plunged nearly 800 points and the economy seemed to deepen into crisis mode, said that several factors were prompting clients, not just last week but in the last several weeks, to cancel trips or simply to not book discretionary travel.
It is an election year, for one thing, and agents said some clients are holding off on vacation decisions until after the votes are counted. Other agencies are dealing with local issues, such as the repercussions from recent hurricanes. Gas and energy woes and, of course, the news surrounding the stock market slide and the Congressional bailout package were all mentioned.
However, a portion of retailers, and not necessarily all in high-end travel, reported recent business activity had been normal or close to it. However, predictably, this is more often true among agencies selling pricier trips.
For Stratham Travel in New Hampshire, the effect of a sliding economy has been dramatic. Chelsea Bailey, a travel consultant at the agency, said it had been dead at the office for two weeks, and it all had to do with economic issues. She did not necessarily mean just the stock market. She said that locally, when gas prices were at their highest, “people started putting money away for oil to heat their homes this winter, not for the family vacation.”
Roberta Sonnino, whose Roberta Sonnino Travel in New York serves clients in the banking and brokerage businesses, faces issues on the leisure and business travel fronts. Leisure clients, she said, were inquiring about cancellation costs because they were concerned about being away from their offices or their clients for an extended period. As for the corporate clients in that field, “much of the travel has been suspended.”
For some agencies, local issues compete with Wall Street concerns. Bettie Harding Lee, owner of Woodlake Travel in Houston, said she believed the stock market was contributing to the quiet at her agency. “The lack of action by Congress has made clients very nervous,” she said. Hurricane Ike was a factor, too, she said. Most Houstonians only got electricity on the Saturday before the Sept. 29 stock market tumble, Lee said.
East Town Travel in Milwaukee clocked a few big-ticket sales in the day or two after the stock market’s record drop.
Nevertheless, said Jon Harper, vice president of marketing, many clients were already in delay mode, partly due to the election season and partly because “it seems many of our upscale clients are waiting for the big-ticket sellers to provide major incentives.”
At Churchill and Turen in Naperville, Ill., one potential group booking “stopped dead” Monday, specifically because of the falling market, said agency President Angela Turen. (The agency is owned by Turen’s husband, Travel Weekly contributing editor Richard Turen.) Otherwise, she said, business at the upscale agency was typical for September/October, which is normally a slower period.
Barbara King, president of Great Getaways in Leawood, Kan., was among the agents who said business had not been affected by the economic climate. In fact, King said, her Virtuoso agency’s sales are up 32% over 2007.
By midweek last week, Meg North, executive vice president of Brownell Travel in Birmingham, Ala., had finalized a $300,000 Christmas booking and was working on three $100,000 African safaris, among other deals.
Timothy Krenzien, president of Paul Klein Travel in Chicago, said his agency, which focuses on ultra-luxury, has recorded fewer transactions than in 2007, but at 10% higher yields. He said events of recent weeks have not affected that but added he was deeply concerned about the prospect of the Wall Street uncertainty dragging on too long.
Somewhere closer to the middle of the luxe-budget spectrum, All Seasons Travel in Jacksonville, Fla., enjoys a cushion because its niche is Disney products. President Chuck Maida said family vacations are more recession-proof than others, and “the most recession-proof of all family vacations tend to be those involving Disney.” He said there were concerns, but business last week, while slightly off from the corresponding week of last year, was “stronger than we expected, given the economic news.”
Canadians are somewhat outside the storm’s center, but not very far. Toronto-based Travelonly is doing a good business, said Gregory Luciani, its president. However, he said that with all the bad market news last week, Travelonly received a flurry of calls from customers concerned about the possibility of supplier bankruptcies.
Chris Conlin, president of Conlin Travel/American Express in Ann Arbor, Mich., said Michigan’s economy had been so battered for so long that last week’s market news did not matter much.
Business travel is its own story. Jean Covelli, president of the Travel Team in Buffalo, N.Y., said the agency works with many firms that were “moving around swiftly” last week for in-person meetings with clients during the period of market uncertainty.
Other corporate agencies, as far flung as El Sol Travel/American Express in Tempe, Ariz., and Protravel International in New York (No. 19 on Travel Weekly’s 2008 Power List), reported business last week was either normal or even up, as was the case at El Sol, said Chris Davidson, vice president of director business development.
Priscilla Alexander, Protravel’s president, said, “We keep waiting for the shoe to drop.”
Tom Lumley, president and CEO of the Travel Authority in Jeffersonville, Ind. (No. 31 on the 2008 Power List), said, “A single day or two of bad news doesn’t usually change travel plans. ... What happens over the next two to three weeks will influence those decisions more than a couple of bear [market] days.”
Jeri Pollyea, an independent agent in Sherman Oaks, Calif., hosted by Protravel, said the true test would come in a few weeks. Will booked customers travel or not? “I am on pins and needles,” Pollyea said. “From now to the end of this year will be challenging.”