Ninety-seven percent of American Society Travel Advisors (ASTA) members responding to the organization’s recent survey on the coronavirus expect the outbreak to have a heavily or moderately negative impact on their business this year. Jay Ellenby, president of Safe Harbors Business Travel and the chair of ASTA’s board of directors from 2016 to 2018, shared the findings as part of testimony before the U.S. House Committee on Small Business on ASTA’s behalf regarding the impact of the coronavirus on travel agencies and travel advisors.
“Our industry is strong and thriving, and I can assure you the myth of the travel agent/advisor as a dying breed is just that – a myth,” Ellenby told the committee. “But we are facing significant challenges right now, as are many companies in the broader travel industry and beyond. At Safe Harbors, the past few weeks have been among the most difficult our agency has faced since. The terrorist attacks of September 11, 2001, and the near-total shutdown of travel that followed.)
Ellenby shared that, as of the day of his testimony, his agency’s sales are down 20 percent year-over-year, including a 37 percent decline in international travel “that is worsening by the day.”
“We expect March to be devastating and are preparing for sales to be down by far more than 20 percent year-over-year,” Ellenby said. “For April, we can only hope.”
Ellenby shared more results from the ASTA member survey with the committee. The highlights:
In general, 92 percent of clients are either very (56 percent) or somewhat (36 percent) concerned about international travel, while 72 percent are very (16 percent) or somewhat (56 percent) concerned about domestic travel.
In terms of their business, 97 percent of respondents said they expect the outbreak to have a heavy negative (52 percent) or moderately negative (45 percent) impact on their businesses this year. Ninety-eight percent also expect a negative impact on business revenues, with 29 percent expecting a reduction of 50 percent or more, 40 percent expecting a 25 – 50 percent decrease and 29 percent expecting a decrease of 25 percent or lower.
If there is a sustained downturn in travel, 21 percent of respondents said that they would be at risk of going out of business within three months; 30 percent said that they could go out of business within six months. At the same time, 49 percent of respondents said that they expect to continue operating up to 12 months and beyond.
Only 4 percent of respondents reported laying off employees or disengaging with independent contractors (ICs) so fare. Four percent said they had undertaken detailed planning, and 21 percent preliminary planning, for layoffs, but 71 percent of respondents report no planning for layoffs or disengaging with ICs.
The report also delved into reaccommodating clients concerned about traveling: 33 percent of respondents said that all itinerary changes have been resolved to the client’s satisfaction, with another 29 percent saying that more than three-quarters of cases have been satisfactorily resolved and 15 percent saying that more than half have been successfully handled.
Looking ahead, 23 percent said that they think the impact of this crisis will not be long-lasting, while 45 percent expect it will be three to six months before clients resume a normal travel schedule. Thirty-two percent said that they expect it to be six to twelve months until normal travel resumes.
Ellenby also shared ASTA’s recommendations as to what Congress can do to aid travel advisors:
- SBA Loans – Ellenby asked Congress keep a “close eye” on the allocation of loans to help small businesses. Impacted by the financial losses as a result of the coronavirus outbreak, and to consider providing additional funding if the situation worsens.
- Economic Stimulus – Ellenby called for “quick action” on economic stimulus, including President Trump’s recently proposed one-year payroll tax cut and other measures.
- REAL ID – With the deadline for travelers needing to use a REAL ID-compliant state-issues driver’s license or acceptable alternative to board a flight looming in October, only 34 percent of Americans have a REAL ID-compliant identification. Ellenby asked Congress to pass the Trusted Traveler REAL ID Relief Act and “otherwise provide the Transportation Security Administration the tools to manage this looming deadline.”
- Do No Harm – As Congress considers legislation in the coming months, Ellenby asked that they keep in mind the needs of small business travel agencies and th impact of federal regulations on their operations.
“As the old saying goes, ‘This too shall pass,’” Ellenby said. “9/11, SARS, the Great Recession – our industry has been through similar situations and has come out stronger on the other end.”