Up, Up and Away

Up, Up and Away
Planner: Michael Edwards of Cassis Travel Services.

Travel agencies were hit hard during the pandemic, but some that weathered the upheaval are now doing blockbuster business. 

“It smacked us hard,” Michael Edwards, senior vice president and general manager at West Hollywood-based Cassis Travel Service Inc., said of the pandemic. “We had to re-morph overnight … we let so many people go.” 

According to a survey conducted by the American Society of Travel Advisors in August 2020, 93% of travel agencies reported business income down at least 75% compared to 2019. Nearly four out of five reported that income was down 90% or more. As a result, more than 43% said that they laid off or furloughed three-quarters or more of their staff. 

“The pandemic wiped us out,” said Jerry Saxe, president of Carlisle Travel Management, who was doing $30 million in sales pre-pandemic. Carlisle has West Coast offices in Commerce and is a branch of the Tzell Travel Group which based in New York City.   While the pandemic posed the biggest challenge for travel agencies, online travel sites and skyrocketing brick-and-mortar rents have also caused disruption for the industry. 

Leisure reigns

With vaccines and few travel restrictions, leisure travel has returned to pre-pandemic levels. However, corporate travel has been slow to catch up. According to Bloomberg, leisure travel continues to outperform business travel, with platforms such as Zoom and Google Meet allowing face-to-screen meetups at little to no cost for businesses.

Both CTS and Carlisle Travel made hard pivots, shifting their expertise in corporate travel to leisure travel. As a result, both businesses have seen sales return to pre-pandemic levels.  

“Before, it was all business, now it’s more leisure,” said Saxe. “I still like corporate travel, but leisure is making me money.”

According to a December survey of luxury travelers by software company Flywire, 67% of respondents replied that they “could not imagine traveling without an agent/advisor.”

But catering to leisure travel still comes with its share of challenges. High-end travelers who initially turned to travel agencies to help them navigate pandemic protocols are continuing to use the firms to create unique travel experiences. Many consumers now expect travel agents to be available for travel-related issues 24/7 and maintain up-to-date information on all travel restrictions.

“We turned into the health care field, navigating insurance and private jets, special waivers and visas,” said Edwards, whose business caters to entertainment business clients and music tours. “And we focused on luxury leisure, we went to the luxury concierge model.”

Many white-collar workers have retained their work-from-home status, which allows them more flexibility to travel. 

Some are also opting to travel in groups, with family or friends, and eyeing attending once-in-a-lifetime events such as the upcoming Olympics in Paris or the FIFA Women’s World Cup. 

Luxury travelers cite several reasons to connect with a travel agent, rather than booking their own travel online. According to the Flywire survey, respondents who said they used an advisor for trips in the past 18 months were up 5% year over year. 

About 87% of those responding said agents are the best way to create personalized travel experiences, and 78% use their advisor to manage their itinerary in real time. Those who took the survey had a household income of at least $100,000 a year and traveled for leisure at least twice in the preceding year, spending at minimum $5,000 per person.

“People feel more comfortable using experts … having somebody they can rely on,” said Saxe. He recalled that he had an experience with friends who booked via a popular travel site only to arrive at their booked hotel to find it didn’t have room for them. 

“Who are you going to complain to?” he wondered.  

These types of experiences have clients driving millions of dollars in business to these Los Angeles-based agencies. According to its website, CTS does $150 million in sales per year, and Saxe noted that Carlisle did $73 million in sales last year and is on track for $100 million in sales this year.

Corporate slow

Per a report released in April by Deloitte, companies that saw significant cost savings from not sending employees on business trips during the pandemic are working to accommodate expectations from their employees.  

“The return of corporate travel continues to take a winding road as both business leaders and travel suppliers consider not just rising costs but the necessity of certain in-person meetings amid the increasing use of technology to offset financial and environmental goals,” said Mike Daher, vice chair of Deloitte. 

The report noted that live events will drive a large share of corporate travel this year, “advancing from the fifth biggest driver of increased spend in 2022 to the top spot in 2023.”  

For CTS – whose clients include Netflix Inc., Warner Brothers Entertainment Inc. and NBCUniversal Media – studios are now traveling talent, but not as often as pre-pandemic. Music tours, however, are going full force. 

“We’re trickling back into corporate,” said Edwards. “Music tours hire specialized traveling crew, so they’re back. Many film and television productions are traveling top talent, but hiring local crew … It has all started to come back and there are not a lot of other companies like us.”

Help wanted

The demand for travel agency services means an uptick in hiring, which has been a challenge for many firms. According to a Travel Age West survey of travel advisors at the end of 2022, about 30% of agencies are currently hiring, up from 21% in 2022. Of the respondents, almost half said they personally know an individual who joined the travel industry for the first time, up from just 21% in a similar poll in 2021. 

“The labor is almost non-existent,” said Edwards “We’ll mentor or train, and they’re high paying.” 

Edwards noted that many young people who might be interested in the positions don’t know how to get into the business. In addition, dealing with clients, especially high-end business travelers, can be a lot of pressure.

“It’s not cooling,” Saxe said of the market. 

His company is also hiring, even after bringing on 150 independent contractors after pandemic restrictions were lifted. 

“We’re so busy, we can’t see straight,” Saxe said.  “I’m working until midnight.” 

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