As Valley businesses began to feel the sting of an economic slowdown last year, trimming the fat became common practice, and that included corporate travel budgets, taking a big bite out of retail travel agencies’ customer base. Factor in the cuts in agent commission fees from airlines (they’ve gone from 10 percent to 5 percent since 1995) and competition from the number of on-line travel sites that have sprouted up, and the retail travel industry has had it any way but easy. But while leisure travel has remained relatively flat through the first half of the year, some Valley-based travel agents and industry experts say they are starting to see a turnaround in corporate bookings. They indicate that some of their corporate clients are returning as travel budgets loosen up. Other clients are simply souring on on-line travel sites where personalized service is virtually unheard of. As a result, the corporate business has begun to somewhat offset the losses on the leisure side of the industry and agents are either reporting positive year-to-date sales figures, or predicting them by the year’s end. “It’s kind of interesting, really,” said Joe McClure, owner of Montrose Travel, No. 15 on the Journal’s 2001 list of largest privately owned Valley-based companies. “I would say that between last summer and the first quarter of this year we saw cuts in corporate travel spending of as much as 25 percent. But now, we are getting calls from corporate accounts in our database who say they shop on line but can’t get the level of service they need. That means we are getting a significant amount of new business to offset the softening of our existing business.” Sales at Montrose Travel for the first half of the year were up 14 percent over the same period in 2000. McClure said he expects those figures to remain stable right through Christmas. “We estimate our new business growth (for the year) will amount to close to 30 percent,” he said. Business has not been quite as brisk at Crene’s World Travel in Northridge. Sales for the first two quarters this year were down by about 20 percent compared to 2000. General manager Tim Walsh said the downturn was directly related to the tech-wreck, which hit one of his biggest corporate clients whom he refused to identify right in the gut. But he too is beginning to see light at the end of the tunnel. “One of our large corporate accounts was a tech-related firm that went through significant downsizing,” said Walsh. “But guess what? Some of those clients are landing at new corporations, and they are coming back around. So, not only do we see corporate travel spending starting to strengthen, we are getting some of the business we already had back. And, I think corporate spending will ease up even further in the third and fourth quarters because I’ve seen some more movement in recent months.” Nancy Linares, chairwoman of the Association of Retail Travel Agents based in Lexington, Ky., said she’s hearing from many of her roughly 10,000 member agents throughout the country that corporate clients are moving from the Internet back to the agents. She suggested many corporate clients jumped ship for Internet travel sites, such as Expedia, Travelocity and Biztravel.com, because of the perceived convenience. But consider how much time it takes to book an online itinerary, and the lack of service on the other end, and eventually, she said, the immediacy of Internet booking is far outweighed by the service an agent can provide. There’s another potential silver lining for travel agents. The Valley is home to many mid-sized technology firms. And, says one industry expert, because they are typically heavy users of retail travel agencies, their growth will precipitate increases in travel activity, bringing more business to the local agent. “What is good for the retail markets is the fact that, because the big companies out there have had to undergo such severe cutbacks, it’s the small companies that are making progress in new developments of products,” said Tim Small, vice president of business development for Rosenbluth International, a Philadelphia-based corporate travel management firm. “So the small to mid-sized agents will see a trickle-down effect from that.” Earlier this month, McClure acquired Montrose-based Village Travel, a consortium of five smaller agencies that merged over the last few years. “Historically, we were worth about 10 times our earnings. Now it’s closer to about four and five times,” said McClure. “And that is the result of smaller commissions and, yes, the online competition. But because I don’t charge any fees to my clients, I’m able to stay competitive. But the smaller agents are going to have to start charging fees to survive.” Walsh, from the 25-year-old Crene’s World Travel, said he rarely charges his corporate accounts fees. Despite the outlook for modest growth, he’s aware of the threat of being bought up by a larger agency. He’s hoping to see leisure travel bookings pick up over the third and fourth quarters, but he also said he expects more threats from the airlines. “I foresee agency commission fees going down to zero sometime down the road here, which will hurt us very much,” said Walsh.