Executive tells Congress about coronavirus threat to travel agencies

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“We expect March to be devastating and are preparing for a 50% year-over-year decline,” travel agency executive Jay Ellenby told the House Committee on Small Business.
“We expect March to be devastating and are preparing for a 50% year-over-year decline,” travel agency executive Jay Ellenby told the House Committee on Small Business.

Testifying before the House Committee on Small Business on Tuesday about the impact of Covid-19 coronavirus on travel retailers, agency executive Jay Ellenby called “the past few weeks among the most difficult our agency has faced since 9/11.”

Ellenby, president of Safe Harbors Business Travel in Maryland and a former ASTA board chairman, said his agency’s sales are down 20% from a year ago and that international travel has fallen 37%.

“We expect March to be devastating and are preparing for a 50% year-over-year decline,” Ellenby said. 

He said Safe Harbors laid off a “significant” number of travel agents on Monday. Corporate travel is way down and convention travel has dried up in March and April, as concerns about spreading coronavirus have companies and organizations canceling large events.

“We do not see any kind of light at the end of the tunnel when it comes to the corporate side,” he said.

Regarding leisure travel, Ellenby said it would be difficult for many agencies to remain in business with cruise sales way down, and that the State Department’s advisory to U.S. citizens to avoid cruising has been damaging.

Committee chair Nydia Velazquez (D-N.Y.) asked Ellenby how long travel agencies can survive in the current business environment.

“There are many agencies right now that are shuttering their doors as we speak,” he said, “and some of them will be closed within 3 to 6 months.”

Ellenby shared statistics from an ASTA member survey: 22% reported a risk of going out of business in three months and 25% have that same concern in the next six months. 

Agencies with a number of employees will likely have to consider layoffs as Safe Harbors did, Ellenby said. But many agencies consist of a single person or just a few employees.

Ellenby suggested that Congress and the Trump administration provide access to Small Business Administration loans. He urged the government to consider additional funding for SBA loans and easing the requirements for collateral needed to secure one. Agencies are service businesses without access to large amounts of collateral, he said, recalling that after 9/11 agents were putting their homes up as collateral to secure loans.

Ellenby told the committee that travel agencies sell the majority of airline tickets in the country and are the primary distributor of cruises and tours. Ninety-eight percent of agencies meet the Small Business Administration’s definition of a small business, and two-thirds are owned by women.

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