Download the 2010 OC TRAVEL AGENCIES List (pdf)
Orange County’s largest travel agencies saw a sharp drop in local business last year as the downturn slowed personal and corporate travel across the board.
But 2010 is looking up already.
According to this week’s Business Journal list, which ranks the county’s 20 largest agencies by local 2009 revenue, the group posted an overall decline of 14.2% to $737 million in sales, compared to 2008’s $859 million in sales.
“Last year was the worst travel year in the history of this industry,” said Thomas Jackson, president of No. 16 Santa Ana-based World Travel Bureau Inc.
Nine of the local agencies posted declines in 2009. Two agencies saw double-digit gains. Two were flat. Seven were Business Journal estimates.
The 10 companies that rely more on corporate business saw a rougher 2009 than agencies that cater to leisure travelers.
No. 1 Boeing Travel Management Co. and No. 5 Milwaukee-based Adelman Travel Group, which has an Irvine office, do almost all of their business in the corporate sector.
The unit of Chicago-based Boeing Co., which has operations in Huntington Beach and Seal Beach, in the past handled travel for Boeing workers, as well as other companies.
The agency shut down its corporate travel service in January of this year to focus exclusively on Boeing employees.
“We are focusing only on travel management for Boeing employees at this point,” said Isabella Donovan, vice president of global operations and account management.
Its revenue from OC operations in 2009 was down 25.6% to $125.5 million.
Adelman Travel has seen a surge in travel management business—which helps other companies mitigate excess travel-related costs—rather than traditional travel booking, said Steven Cline, chief operating officer.
While some companies have adapted to survive, others are consolidating or shutting down.
“A lot of the competition has either closed or merged to survive,” said Ricci Zukerman, president of No. 5 Santa Ana-based Worldview Travel Management Co., which had an estimated $60 million in local sales.
World Travel Bureau closed three of its offices and converted the business into a wholly online, “virtual agent” model.
“We’ve taken three of our offices virtual in the last year,” Jackson said. “We didn’t lose any staff as a result.”
The company has its headquarters on Main Street in Santa Ana, which is staying put, and two other offices in Orange and Yorba Linda, as well as several locations in California.
The agency is evaluating whether to close offices as their leases expire.
“We have come to find 90% of the time people coming to our brick and mortar locations are people coming to work rather than customers,” Jackson said. “With vast improvements in technology, nearly 95% of our business is done over the phone or Internet.”
World Travel Bureau’s revenue from OC operations was down 20% to $11 million.
Others are looking to the downturn as a chance to expand with acquisitions.
Worldview is eyeing several other smaller agencies that managed to weather the downturn, according to Zukerman.
Better 2010
Many agencies have hopes for better numbers on next year’s list as 2010 already has shown some improvements, ahead of expectations.
Many weren’t predicting a recovery until the latter half of 2010.
“We’re not up to 2007 numbers, but we are inching closer as companies started to keep us very busy earlier in the year,” Adelman Travel’s Cline said.
Adelman Travel’s revenue from OC operations was up 13.2% to $60 million from $53 million.
Lower prices for travel and a pent-up demand have driven business at many of the local agencies.
“We’re seeing travelers from both ends of the spectrum, corporate and leisure, returning to the market after sitting on their hands at home for most of the downturn,” Zukerman said.
The industry is seeing a shift in businesses and consumers turning away from using online travel booking websites in favor of travel agencies again.
“There is a growing trend in the industry to return to a travel agent,” said Filomena Andre, vice president of travel products and services at No. 3 Costa Mesa-based AAA Travel Agency of Southern California.
According to a study by Massachusetts-based Forrester Research, 27% of travelers used a travel agent to book travel plans in 2010, marking a 4% rise during the past two years.
“It’s been an encouraging trend of educating the public that using a travel agent isn’t more expensive than using the website,” Zukerman said.
AAA Travel, like other national companies, does not report OC sales separately from other Southern California operations. Its estimated revenue from OC operations was $75 million.
AAA Travel primarily books leisure travel for members and consumers.
Travel abroad has begun to return to 2007 levels, Andre said.
“Our trips to Europe and abroad are starting to return to normal levels with the low prices and the strength of the dollar,” she said.
World Travel Bureau Inc., No. 14, Boulevards of Travel Inc. of Newport Beach, No. 18 Brea-based Dorel Group and No. 20 Huntington Beach-based Now Voyager Travel, said that 50% or more of their revenue comes from leisure travel.
Corporate travel agencies are hoping to see the same kind of rise in their business as companies are starting to talk to agencies again about their travel plans.
“The corporate business has been dormant for the past 18 months, (but) businesses are now calling wanting to discuss travel arrangements,” Zukerman said.
