Biz Travel Agencies Rocked by Govt. Shutdown
by Maria Lenhart
Biz Travel Agencies Rocked by Govt. Shutdown

The first week of the federal government shutdown has had a devastating impact on travel agencies handling government business, leading to furloughed employees and a significant loss of revenue.

Not only is the government shutdown slamming agencies with government clients, it’s a growing concern for agencies and other businesses dependent on corporate travel, according to Patty Higginbotham, vice president of government relations and general counsel for the Global Business Travel Association (GBTA).

“There is an overall sense of angst and uncertainty among our members,” Higginbotham said. “We’re a week into the shutdown and there is concern not only about the damage already done, but about the possible long-term effects.

“And now it’s rolling into a heated debate about the debt ceiling. There is no end in sight.”

A double-edge sword
For travel agencies with government clients, the implications are a “double-edged sword” that has not only stymied current business but has put new business at a standstill, she said. “There is no possibility of gaining new clients or expanding your services to the ones you have.”

The government shutdown has also deeply affected private-sector companies dependent on government contracts. That’s led to layoffs that have negative implications for business travel, she added.

“Lockheed Martin, which is dependent on government contracts, just announced they are laying off 2,400 people,” Higginbotham said. “So the shutdown means lost revenue for the whole economy – it goes far beyond the 800,000 federal employees on furlough.”

Agents on split-shift
The shutdown is “costing tens of thousands of dollars a week” for Duluth Travel, an agency in Duluth, Ga., that derives 70% of its business from federal government clients, owner Arthur Salus told Travel Market Report.

While Salus kept all 37 of his employees at full pay last week, this week they are working on a rotational, split-shift basis.

“We hate to do this because many of them are living paycheck-to-paycheck, but there is no other option,” he said. “My management staff and I aren’t taking any pay at all now.”

Early last week, Duluth Travel was busy flying travelers back home who had been ordered to cut their trips short by the federal agencies who employ them. Duluth handles travel for several major federal agencies, including the Veterans Administration.

“The shutdown has not only affected the travel for V.A. employees, but even for V.A. hospital patients,” Salus said.

While currently a headache for the agency, Salus said federal government travel is a specialty he plans to continue.

“Ordinarily this is good, steady business and a very good deal for agencies to get into,” he said. “The new federal contracts we’re getting are for 15 years, so it’s something you can really count on.”

Reduced hours at Omega
Omega Travel World, which handles travel for government agencies as well as companies with government contracts, has had to furlough about 10% of its workforce, according to executive vice president Goran Gligorovic.

“For some of our clients, travel has been cut down considerably,” he said. “So we’ve had to do a combination of reduced hours and furloughs as we can’t afford to keep everyone on the payroll.”

The agency will not cut any jobs permanently and plans to put everyone back to work as soon as the shutdown is lifted, Gligorovic said.

“Preserving those jobs is very important – we would hate to lose any of our people.”

‘Environment of uncertainty’
While his agency has not been directly impacted by the shutdown, Michael Cameron, CEO of Christopherson Business Travel, agreed with GBTA’s Higginbotham that the impasse in Washington, D.C, is creating an “environment of uncertainty” that does not bode well for travel.

“Business travel has been sluggish this year, when it should have been growing,” he said. “The business community doesn’t like uncertainty – it scares them. So I’m very worried about the shutdown from that point of view.”

Tip of the Day
Daily Top List

World’s Tallest Roller Coasters

1. Kingda Ka, Six Flags Great Adventure (456 ft.): Jackson, New Jersey

2. Top Thrill Dragster, Cedar Point (420 ft.): Sandusky, Ohio

3. Superman, Six Flags Magic Mountain (415 ft.): Valencia, California

4. Fury 325, Carowinds (325 ft.): Charlotte, North Carolina and Fort Mill, South Carolina

5. Millennium Force, Cedar Point (310 ft.): Sandusky, Ohio

Source: Today

Top Stories
Benchmark Looks To Food & Beverage As A Draw For High-End Customers
Benchmark Looks To Food & Beverage As A Draw For High-End Customers

Newly merged and eyeing more urban markets, Benchmark wields a $200 million F&B budget, and the power of Southwestern star chef Stephan Pyles, to draw high-end travelers and corporate meetings.

Memo to Travel Agents: Don’t Overlook Meetings Travel For Growth
Memo to Travel Agents: Don’t Overlook Meetings Travel For Growth

With such a large share of meetings travel unmanaged – at small, mid-sized and large enterprises – travel agents shouldn’t overlook the opportunity to build a specialty in corporate groups, experts say.

Corporate Travel Buyers Name Ritz-Carlton As Top Luxury Brand
Corporate Travel Buyers Name Ritz-Carlton As Top Luxury Brand

Ritz-Carlton came out on top as the preferred luxury hotel brand of corporate travel buyers.

It’s Quality, Not Quantity, That Keeps Road Warriors Happy
It’s Quality, Not Quantity, That Keeps Road Warriors Happy

It’s not just the number of trips, but also the quality of travel suppliers and the leniency of travel policies, that matter to road warriors.

Marriott Turns Its Focus To Meetings
Marriott Turns Its Focus To Meetings

MICE are the market of the day, with “scores of new luxury and lifestyle properties and significant new ballrooms worldwide” on the agenda as Marriott merges with Starwood.

Airbnb Partners With Amex GBT, BCD and Carlson For The Corporate Market
Airbnb Partners With Amex GBT, BCD and Carlson For The Corporate Market

An expansion into the corporate market offers negotiated rates and data tracking.

News Briefs
Advertiser's Voice
Advertiser's Voice: Melia Pro