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Halt on corporate travel hits Omaha business hard

April 04, 2020 - 10:02 PM

OMAHA, Neb. - Omaha-based Travel and Transport was nearing a 75th birthday and coming off its best back-to-back years of bookings yet.

Sales had soared to $3.3 billion, up from $1.9 billion five years earlier.

Its travel management operation — headquartered in a 15-story tower jutting above 72nd Street and Mercy Road — had grown to include 1,800 workers in seven countries beyond the United States.

But now COVID-19 essentially has grounded corporate travel, the company’s lifeblood, and Travel and Transport is busy taking steps to ensure that its full crew gets back on a course that had revenue up nearly 70% since five years ago.

“To go from having two of our best years in history to having volume down more than 95% — it’s staggering, almost unimaginable, in many ways,” Kevin O’Malley, chairman and chief executive, told the Omaha World-Herald.

Founded in 1946 by a local newspaper reporter, Travel and Transport today offers a window into how suddenly the novel coronavirus pummeled the largest employee-owned travel management company in the world.

The damage was sudden.

In mid-February, O’Malley said, the company’s bookings for airlines, cruises, cars and hotels dipped about 10% compared with the same time a year earlier. “All of a sudden they were down 20%.”

By early March, the dive was 35%, he said. “And the numbers continued to drop pretty precipitously until every corporate customer we have either banned nonessential travel or travel altogether.”

The relative trickle of business still ongoing involves travel advisers booking trips for corporate clients, such as the Mayo Clinic, that provide “essential” services for health care and infrastructure needs, O’Malley said.

He described the coronavirus impact on the company as worse than the crises of 9-11 and the Great Recession combined.

When terrorists attacked the U.S. on Sept. 11, 2001, commercial airlines shut down completely for about 10 days before Americans were mostly back to travel routines four months later, O’Malley said.

He said the financial downturn of 2008-09 ushered in a travel slump that lasted about 18 months, but, at its worst, dropped company bookings by about 20%.

“Both of those together don’t come close to what we’re seeing now,” O’Malley said.

Faced with a health pandemic that has no clear end in sight, Travel and Transport recently furloughed or cut hours for most of its workforce for 60 days. A few hundred employees in North America and Europe continue working full time, but at reduced pay. Most still working are doing so from home.

O’Malley said he and 18 other officers and board members agreed to forfeit their pay for two months.

The six floors occupied by Travel and Transport at the Omaha headquarters today are largely empty, as the 250 employees based there are either working from home or furloughed. A dozen or so other businesses occupy the remaining floors.

Statewide, the company employs a total of 400 or so workers. Worldwide, the payroll has expanded about 50% in five years from about 1,200 workers to today’s 1,800.

Completely employee-owned since 2002, O’Malley said Travel and Transport’s workforce (average tenure is 17 years) has been understanding and supportive of moves deemed necessary to sustain their livelihood over the longer run.

The COVID-19 outbreak came as the company unveiled a new strategy to strengthen its brand. As part of the effort, said global marketing director Chantel Windeshausen, all entities that had been purchased over the years have let go of vestiges of earlier names and now carry the unified Travel and Transport name.

Acquisitions over the past decade include the 2012 purchase of New York-based Ultramar Travel, followed by international buys of agencies in Germany, Switzerland, France and the United Kingdom.

What does the future hold?

Lately, the Travel and Transport leadership team has been reaching out to congressional representatives to make sure the travel management industry is not forgotten in the nation’s assist to pandemic-affected businesses, O’Malley said.

He said the team has been going over various scenarios on how to move forward in the changing environment, though he doesn’t anticipate bookings to pick up before summer.

“We’re hoping we get on the other side of the curve in June, then companies can start figuring out policies,” he said.

Pent-up business likely will be waiting, O’Malley said, though he suspects a bounce back to take longer than this year.

“It’s emotional for everyone involved,” he said. “We will get through it. This is not forever.”

News from © The Associated Press, 2020
The Associated Press

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