The September 11th attack
Classic Vacation cutting 220 jobs
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By Johnny Brannon
Advertiser Staff Writer
A major travel firm with offices in Hawai'i will lay off 220 employees and cut work hours for others because of the tourism slump since the Sept. 11 terrorist attacks.
Classic Vacation Group, which operates Classic Destination Management in Honolulu, also retracted prior predictions that it would turn a third-quarter profit.
"The lower levels of leisure travel because of the terrorist attacks are similar to what we saw during the Gulf War in the early 1990s," Classic Vacation Group's President and Chief Executive Ron Letterman said in a statement yesterday. "Our downsizing is in response to an anticipated volume shortfall in the near-term. However, we believe we are appropriately structured to rebound aggressively when leisure travel recovers."
The company, based in San Jose, Calif., specializes in upscale getaways and customized vacation packages. It has 14 employees in Hawai'i, but the number affected by the cutbacks was not available yesterday. Employees in the Honolulu office declined to comment.
The company said the cutbacks will take place at all its locations, which also include offices in New York and Illinois, and that compensation for senior executives would be reduced as well.
In late July, the firm announced a second-quarter profit its first profitable reporting period since the third quarter of 1999 and predicted that it would continue to make money. Net income for the second quarter 2001 was $355,000, or 2 cents a share, compared to a loss of $2.2 million, or 15 cents a share, a year ago.
The company, which formed in 1998, was previously known as Global Vacation Group Inc. The company expanded rapidly that year when it acquired four large travel-package firms for $63.7 million.
Classic Vacation's most popular destinations include Hawai'i and Florida, as well as parts of Europe and Mexico, according to a company profile.
It also provides vacation arrangements through exclusive agreements with Amtrak and Hyatt Hotels.
Correction: Classic Vacation Group employs 14 people in Hawai'i. A previous version of this story had an incorrect number.