Orange County’s largest travel agencies continued to see improvement last year, bolstered largely by a return to business travel, according to this week’s Business Journal list of travel agencies.
The 19 largest agencies in OC by gross sales posted a 10% gain in 2004 revenue to $954 million, compared to a year earlier. And 2005 is looking even better as the economic rebound continues.
“In the first two quarters of 2005, our transaction level is 20% above 2004,” said David Buskirk, president of No. 1 TQ3 Navigant in Santa Ana.
The list ranks the largest travel agencies operating here by 12-month sales at their OC offices. Figures for four agencies,American Express One, TraveLeaders, AAA Travel Agency and WorldTravel BTI,are Business Journal estimates.
The AAA estimate is based on information in the company’s annual report to members. Other estimates are based on industry-wide growth. Excluding estimates, the remaining 15 agencies posted a 10% sales increase from a year earlier.
Total U.S. travel agency sales reached $45.4 billion last year, according to Airline Reporting Corp., Arlington, Va., which provides data for airlines, travel agencies and corporate travel departments. Meanwhile, the total number of agency locations in the U.S. accredited by Airline Reporting dropped 9% to 23,324 in 2004.
TQ3 Navigant held the No. 1 spot on the list with $175 million in annual sales, up 1% compared to last year.
Last month the company bought Synergi Travel Australia Pty Ltd. and Synergi Travel New Zealand Ltd. from Synergi Inc. It also said it bought eTravel India.
Recently, the company was delisted from Nasdaq for failing to file its 2004 annual report on time.
President David Buskirk said the company is working with the Securities and Exchange Commission to determine how to account for 2004 acquisitions and expects to have the issue resolved shortly.
“It hasn’t had any impact on our customers,” Buskirk said.
TQ3 Navigant recently picked up accounts from Nordstrom Inc. and from Bank of America Corp. Its military and government division,Sato Travel,handles about 50% of the Department of Homeland Security’s travel business nationwide.
No. 2 American Express is the world’s largest corporate travel agency, but maintains a smaller presence in OC. The Business Journal pegs American Express’ 2004 travel sales at $130 million.
American Express posted an estimated $20 billion in companywide travel-related revenue last year. Its North American air travel unit alone accounted for $8.9 billion last year.
Only two of the top five agencies,TQ3 Navigant and No. 4 Boeing Travel Management Co.,provided revenue data. Together, those two agencies alone account for roughly a third of the revenue on the list, including estimates.
Of the agencies that provided sales figures for 2004, 12 reported an increase, two reported a decrease and one reported no change.
The biggest growth was at Uniglobe Travel USA LLC of Irvine, which moved up one spot to No. 7 with 56% growth to $50 million.
Its growth came as small- to midsize companies, which make up the bulk of Uniglobe’s business, boosted travel.
“We’ve seen travel come back,” said Malcolm Read, who heads the regional office. “In the first part of the year, people were still being cautious (about business travel), but not any more.”
The only other agency to report growth of more than 20% was No. 8 TravelStore Inc., Irvine, which saw its revenue climb 26% to $48 million in 2004.
“We landed some nice corporate business,” said Sue Brunsmann, general manager.
She said this year looks even better.
“We’re typically slow in August,” she said. “But right now we’re anything but slow.”
No. 14 World Travel Bureau Inc. in Santa Ana, one of the oldest agencies in OC, saw its revenue drop 12% after a 17% falloff in 2003. And No. 19 Back Bay Travel in Costa Mesa shrunk by 3% to $8.3 million.
For most agencies, the upturn in business didn’t translate into more jobs. Excluding estimates, only four of the agencies added staff last year, while seven dropped and four remained the same.
The overall employee count at OC agencies dropped by 1% to 1,513, including estimates.
Some of the decrease was attributed to consolidation.
Uniglobe merged a couple of its OC offices. TravelStore did the same after buying two other OC agencies: Newport Beach-based Bonneville Travel,No. 17 on last year’s list,and Newport Beach-based Good Life Travel.
TQ3 Navigant transferred some reservations center staff to Ontario.
“Santa Ana is still the regional headquarters, but it’s less expensive to have the reservations center in Ontario,” Buskirk said.
No. 18 Carlson Wagonlit Travel in Huntington Beach, which saw revenue grow 16% to $9.5 million, upped its employee count to 15 from 11 a year ago.
“We kicked butt last year,” said President John Dekker.
Despite a decade of debate over the long-term survival of agency business, many continue to thrive by adding Internet services or focusing on specialty travel.
Carlson Wagonlit’s Dekker has targeted the Chinese market.
“China has taken off,” he said.
As a result, he has partnered with an agency in Hong Kong and traveled to China in May to learn more about the market.
Some business travelers have given up on using the Internet exclusively to book travel.
“They say it’s worth it to pay a travel agent because of the time it saves,” said Uniglobe’s Read.
Uniglobe uses software that can scan 50 or 60 Internet sites at once to find the best fares, he said.
Mark Weston, president of No. 16 Santa Ana-based Presidential Worldwide Travel LLC, attributed a portion of his company’s 14% growth to the same trend.
Thirty-two percent of business travelers use a travel agent, up from 25% a year ago, according to the 2005 National Business Travel Monitor released in May by Orlando, Fla.-based Yesawich, Pepperdine, Brown & Russell.
Most of OC’s largest travel agencies focus on corporate travel. Only No. 5 AAA Travel Agency, No. 10 Worldview Travel in Santa Ana and No. 17 Dorel Group have more than half their business in the leisure sector.
AAA is all leisure travel.
The outlook in the near-term appears to be bright. The Business Travel Monitor found that 42% of active business travelers expect to take more trips in the year ahead, compared to 24% who expect to take fewer trips.
Business travel grew 4% in 2004 and comprised about 19% of all U.S. travel and roughly one-third of all travel spending, according to trade group Travel Industry Association in Washington, D.C.
Nationally, leisure travel increased by 9% in 2004 and is expected to grow by about 3% this year.
“Clients are traveling at pre-9/11 levels,” Buskirk said. “That’s huge.”
