Travel agents hope business picks up this year 1991: A TROUBLED JOURNEY

February 06, 1992|By Michael Pollick

Anne Schmidt, the owner of Galleria Travel Center in Lutherville, flips through the morning's mail and pulls out the envelope she is looking for: a check from Club Med.

"That'll pay the rent," she says.

Ms. Schmidt's relief is understandable.

With only a few bright spots appearing in the travel industry -- cruise bargains and giveaway trans-Atlantic airfares, for example most travel agencies are licking their wounds from a grim year and hoping things get better.

"It was a very tough year, a very bad year," says Steve Ballinger, managing editor of Travel Management Daily, a New York trade publication.

"I think people are scared," says Stanley Levin of Travel Destinations Management Group Inc. His agency, which concentrates on business travel, has seen declines in all of the kinds of business it handles, including incentive programs that encourage salesmen by promising a trip to the tropics.

"January this year compared to January last year, I am dramatically up," he says. "But January last year we were in a war." Revenues have been pushed higher by the increased cost of airline tickets rather than any increase in customers, he says.

"I don't think you're going to see this rebound before the economy rebounds. I think you're looking at the latter part of '92, and that's only because I can't see beyond that," Mr. Levin says.

Airlines Reporting Corp., a nationwide clearinghouse that pays travel agents commissions on airline tickets, can testify how hard it was to write those tickets last year.

For the first time in its 27-year history, the organization reported a year-to-year decline in the value of tickets sold, to $47.8 billion, or 3 percent less than in 1990.

Similarly, the Air Transport Association reported that scheduled airline traffic fell 2.3 percent in 1991 compared with 1990, the first decline in a decade in the United States. Moreover, passenger boardings were down 3.4 percent last year, to 454 million, also the first decline in a decade.

"People really changed their travel habits to combat the economy," says Scott Dring, who conducts consumer research for the Travel Industry Association.

Last summer, he says, "they stayed closer to home, stayed for shorter duration trips, used their automobile more often, visited friends and relatives more."

In the travel business -- the third-largest retailing category behind automotive sales and food stores -- such changes in habits affect more than hotels and airlines. National Car Rental, for example, recently sliced 130 of the 1,000 jobs at its Minneapolis headquarters.

"Last year was the first year I asked myself, 'Why am I doing this?' " Ms. Schmidt says.

Mr. Levin and Ms. Schmidt say they are working with corporations to plan trips so that they can use less expensive non-refundable or partially refundable tickets instead of paying full fare.

Even if the corporations save only $60 a ticket, it could reduce their cost of travel by 30 percent a year, Mr. Levin says.

Ms. Schmidt agrees.

"They used to say, 'I need to be in Chicago tomorrow morning,' and they'd pay $800 for a ticket," she says. "Now they say the meeting is not worth $800."

At Towson Travel, owner Gil Cullen is emphasizing bargains. A round trip between Baltimore and London's Gatwick Airport on TWA costs $358 these days, less than it might cost to fly to California.

Ms. Schmidt is pointing people toward the heavy discounts available on cruises. "The bargains are there nowadays," she says.

She says she also is beginning to see increased interest in leisure travel.

"Some people are beginning to inquire and price for summer travel," she says. "You can feel a little more of a confidence level that people are planning a summer trip to the Grand Canyon."

But businesses are still cautious.

"Business people are still pricing and planning to take advantage of the cheaper fares," she says.

Ms. Schmidt employs four agents and needs a minimum of $45,000 to $50,000 in gross bookings per month just to pay salaries and the bills.

"That's a lot of airline tickets," she says.

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