Testifying before the House Committee on Small Business on Tuesday
about the impact of Covid-19 coronavirus on travel retailers, agency executive
Jay Ellenby called “the past few weeks among the most difficult our agency has
faced since 9/11.”
Ellenby, president of Safe Harbors Business Travel in Maryland
and a former ASTA board chairman, said his agency’s sales are down 20% from a
year ago and that international travel has fallen 37%.
“We expect March to be devastating and are preparing for a 50%
year-over-year decline,” Ellenby said.
He said Safe Harbors laid off a “significant” number of
travel agents on Monday. Corporate travel is way down and convention travel has
dried up in March and April, as concerns about spreading coronavirus have
companies and organizations canceling large events.
“We do not see any kind of light at the end of the tunnel
when it comes to the corporate side,” he said.
Regarding leisure travel, Ellenby said it would be difficult
for many agencies to remain in business with cruise sales way down, and that the
State Department’s advisory to U.S. citizens to avoid cruising has been
damaging.
Committee chair Nydia Velazquez (D-N.Y.) asked Ellenby how
long travel agencies can survive in the current business environment.
“There are many agencies right now that are shuttering their
doors as we speak,” he said, “and some of them will be closed within 3 to 6
months.”
Ellenby shared statistics from an ASTA member survey: 22% reported a risk of going out of business in three months
and 25% have that same concern in the next six months.
Agencies with a number of employees will likely have to
consider layoffs as Safe Harbors did, Ellenby said. But many agencies consist
of a single person or just a few employees.
Ellenby suggested that Congress and the Trump administration
provide access to Small Business Administration loans. He urged the government
to consider additional funding for SBA loans and easing the requirements for
collateral needed to secure one. Agencies are service businesses without access
to large amounts of collateral, he said, recalling that after 9/11 agents were
putting their homes up as collateral to secure loans.
Ellenby told the committee that travel agencies sell the
majority of airline tickets in the country and are the primary distributor of
cruises and tours. Ninety-eight percent of agencies meet the Small Business
Administration’s definition of a small business, and two-thirds are owned by
women.
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