TSA to impede travel market recovery? Not buyin’ it

TSA airport security

When I finally crawled out of bed and caffeinated Saturday morning, I made the rounds on Twitter and found a bold statement by travel journalist Christopher Elliott: “Thanks to TSA, 2011 could be a flat year for travel”. Despite the digging he did, I’m just not buying it. Passenger inconvenience, especially when it comes to leisure trips, isn’t likely to have a major effect on the travel industry in 2011.

You’ve read it from me on Gadling before: it isn’t the leisure traveler that defines the travel market; it’s the business traveler. These are people who have no choice but to hit the road, whether because they are instructed by their bosses or because they recognize business opportunities that they need for growth or simply to keep their companies alive. As business conditions continue to improve in the broader economy, demand for flights is likely to increase, and those buying tickets will have relatively little choice in the matter.

We’re looking back on what’s shaping up to be a positive year for the travel industry, particularly the airlines. And, according to Elliott, on his blog, “2011 was shaping up to be the best year for travel since the recession began.” He cites expectations of higher prices, even if only slightly, but pent up demand by travelers for “long-postponed vacation[s].”

Thanks to TSA, 2011 could be a flat year for travel http://bit.ly/gsbOfTless than a minute ago via web

The next year of the recovery could be imperiled, however, by new measures implemented by the Transportation Security Administration, specifically body scanners. In fact, Elliott writes:

But now that the Transportation Security Administration has introduced full-body scanners at many American airports, and subjected those who opt out of the machines to an “enhanced” pat-down, the 2011 outlook has changed, say travelers.

To support this claim, he talks to Jeff Cohen, an Austin, Texas-based securities trader, who claims to be “torn about whether I’ll travel more next year or not.” Cohen tells Elliott he goes on “a couple of large trips a year” and had a big one in mind for the first half of next year, “to somewhere exotic.” Now, Cohen tells Elliott, “[T] he recent TSA crackdown has me rethinking that.”

Further, the Consumer Travel Alliance sees the traveling public as generally unlikely to increase its travel activity. Elliott continues:

A majority (46 percent) say they will travel “about the same” as they did this year. Slightly less than a third (30 percent) will travel more, while just less than a quarter (23 percent) will travel less. This contradicts several earlier surveys, which had predicted a significant upswing in travel next year.

The key word here is consumer. The focus, here, is on leisure travel. The needs of business travelers are again overlooked.

Let’s consider Cohen’s case for example. So, he’s rethinking his leisure travel plans for next year. If he has to hop on a plane to close a deal or bring in a new client, is he going to do that? Would he sacrifice a two-hour flight for a 10-hour drive do so? I don’t know the guy, but drawing on my white-collar experiences, I think I know how he’d react to a major business opportunity a few states away … and it wouldn’t involve turning the key to the ignition.

The business traveler really has little choice in whether to hit the road. Could he skip a business opportunity or pass on a project in favor of something local – or to wait for a gig nearby to arise? Of course. But, that would mean turning down the very fees that put food on the table. Sales professionals need to travel to bring in business, fulfillment teams (e.g., the folks who provide the good or service sold) may have to take to the friendly skies and support sometimes needs to be provided on site. This is just how the nature of commerce has evolved. If conditions continue to improve, more of these people will be buying plane tickets.

And, they’ll pay more for them.

The nature of business travel, given that it occurs in order to support subsistence or the accumulation of wealth (both important), is that it is inelastic, at least relative to leisure travel. There is effectively no choice but to get on a plane, unless extreme measures are brought into the equation. Since business travel relatively inelastic, these travelers will pay more, which supports a continued travel industry recovery.

The fact that business travelers tend to be willing to pay more for their tickets also means that they have less choice in whether to fly. Sure, there are tools out there such as videoconferencing and online collaboration software that can provide a substitute, but a recovering market means that there’s more capital available, which facilitates investment in face-to-face meetings. When your boss tells you to travel, you travel.

As a result, the decision to travel is itself relatively inelastic for the business traveler.

So, if the business traveler is the backbone of the travel industry recovery, the TSA is unlikely to get in the way in 2011, even if every passenger listens to the snap of a rubber glove before an invasive pat-down begins.

Now, let’s take a closer look at the leisure traveler. The impact of the TSA security measures may involve a bit of hype there, too.

Even before Thanksgiving, the close to two thirds of consumers thought the body scans weren’t a big deal, with 70 percent stating they didn’t expect the enhanced security measures to slow travel down during the busiest travel season of the year.

Further, economic growth, if it occurs, will provide consumers with more disposable income. Those who have an interest in travel are likely to become more ambitious, taking the trips they’ve always wanted to. Elliott finds many who disagree with this assessment, but there’s nothing like having a freshly filled checking account to alter your perspective.

We all love to hate the TSA, and I’ll admit that I’m among the many in that camp. There’s nothing worse than waiting in a long security line at a crowded airport. The notion of having to devise and carry out strategies for getting through the checkpoints faster indicates the absurdity of what goes on in airports today. Efficiency is as low as customer service, and there’s little we can do about it.

That said, will body scans and pat-downs impede a travel market recovery next year? It doesn’t seem likely. General global economic trends will determine how many people get on planes next year, not the policies crafted and implemented by government employees.

[photo by oddharmonic via Flickr]

Hotels and spas use corporate retreats for sweet financial revenge

It’s hard to tell who wants a business travel rebound: business travelers or the hospitality companies that cater to them. Routine road warrior jaunts suck, but there are executive retreats, training programs and other opportunities that do appeal even to the most jaded of the white collar folks.

So, the hotels are fighting to get business travelers back, according to Business Insider, and they’re getting creative. Luxury properties, including spas, were nailed by the financial crisis and ensuing recession. They have a lot of ground to make up. To do this, they’re coming up with new programs to get the corporate folks to open their wallets. Some of them are pretty bizarre, even retaliatory. Business Insider reports:

Their new approach is luring clients back to their bedrooms for “must-have” bonding and training sessions that put execs in compromising positions.

Retreats that specialize in corporate getaways have been cooking up programs that encourage extremely awkward and potentially dangerous bonding activities, like fake-trying to kill each other.

Call it the, “You’re putting us out of business? We’re going to push you off tall objects, hike mountains naked with 50 pounds on your back, try to kill each other and make you beg for more” – strategy.

Even with these implications, the response from the business world still seems to be a resounding, “Thank you, sir! May I have another!”

Bank of America, Google and Toyota are among the companies that have gotten on board with these programs. Some of them do get pretty weird, such as:

The icing on the cake is The Death Race, where co-workers sit for 45 minutes in an ice-broken pond, gulp a gallon of milk (even if you’re lactose intolerant), crawl under barbed wire and sprint up a greased-up ramp.

Don’t you remember when the corporate people were just interested in making money? It was all so much easier back then …

[photo by Boss Tweed via Flickr]

Business travelers told to be logical with tickets

In a move that’s shocking because it’s sensible, corporate travel managers are pushing business travelers to make decisions that aren’t stupid. In the past two years, 75 percent of companies in North America have changed their travel policies, with cost-cutting a major motivation. First and business class have become more and more elite in the white collar set, thanks to more restrictive policies, in an effort to put more business travelers in the sky at as low a cost as possible.

But, the need for cost containment isn’t resulting in idiocy. Rather, employees are being told to look for the “lowest logical fare.” Basically, this is “the lowest-priced fare that doesn’t cause travelers to take wildly circuitous routes, cause them to miss important engagements, incur an extra night in a hotel or lose productivity,” reports USA Today.

The report continues:

North American companies, which spent an estimated $48.7 billion on airline tickets in 2009, could save almost $30 billion combined annually if they instituted and enforced stricter travel policies that required non-refundable tickets or the lowest logical fare. That’s according to the survey’s publishers, Egencia and the National Business Travel Association Foundation.

Christophe Peymirat, vice president of global marketing at Egencia, Expedia‘s corporate travel arm, observes, “Based on our research, companies … can save as much as 38% by encouraging travelers to be flexible.” Departure times two hours before or after the desired flight and less-expensive connecting flights (rather than non-stop) are ways this could happen.

Business travelers poised to take fun out of social media tools

Where are you looking for the latest travel information? Well, if you’re a business traveler, especially with a mid-sized company, you’re probably turning to social media tools. And, that makes more than a little sense, given the reach of platforms such as Facebook and Twitter (the former of which pierced the 500 million-user mark this week).

According to the latest research by American Express Business Travel, the white collar crowd is turning to social media more and more to stay in touch with other travelers and keep up with travel industry developments. This is just the beginning, however. Down the road, many expect to use these online utilities to engage more directly in business, particularly through webcasts, forums and online video.

Basically, businesses will figure out how to put to work what kids have been doing for years. The good news? Since social media tools will become synonymous with work for this population, wasting time on Twitter won’t be fun any more, and the boss will recapture some productivity.
According to Christa Degnan Manning, director, eXpert insights, American Express Business Travel, “As businesses around the globe alter the way they communicate and receive information from clients and prospects, social media has also proven to be a useful and effective tool to share pertinent information with employees and drive change in organizations.”

Half of the respondents to the American Express Business Travel survey indicated that “they use social media to some extent to support travel management today,” and the proportion went up to 59 percent for mid-sized companies (defined as $3 million to $10 million in air volume).

So, why do they use social media tools? Forty-four percent say they want to stay up on the latest travel information, with 43 percent reporting that they can “learn and communicate best practices and reduce business travel costs”. Other priorities include finding preferred vendors and services (42 percent), hunting for travel patters that could result in improved rates or services (34 percent) and encouraging networking among travelers (26 percent).

What’s most horrifying about this research? Well, it’s that social media tools are becoming useful …time to kill that FarmVille account, right?

White Collar Travel: How Important Is That Phone Call?

The biggest complaint that non-business travelers have about the white collar folks likely involves cell phones. Our reluctance to turn the off at the appointed time is probably the greatest annoyance to those around us, though the Gordon Gekko-style pacing and posing at the gate tends to ruffle some feathers, too. I’ve overheard and even been asked countless times the very simple question: “Is it really that important?”

Of course, it’s sometimes phrased, “Nothing can be that [insert expletive of choice here] important.”

Now that I’m out of the game, my perspective on business travel has changed greatly, but there are some quirks and habits that still make sense to me. When I see a guy in a suit shaking his head dramatically, waving his arms and clenching his jaw, I get it. Chances are, it really is that important. Some issues won’t wait, especially if you’re bouncing up against a deadline and are about to be inaccessible for several hours.

In fact, it’s measurable.
Whether it’s commissions or billable hours, every white collar traveler has a number to hit – for the firm and, more importantly, personally. A manager squeezing in those last few minutes before the phones have to go dark can set people on the right course for the next four hours, resulting in possibly tens of thousands of dollars of value to his company.

Now, that’s the positive side of this. There’s also the crisis scenario. The door’s about to close, and you have only seconds left. Your project is blowing up, and your team needs any information or guidance you can give. Anything you can do will make life that much easier for the half a dozen or more people relying on you. I’ve been on both sides of this one and can assure you that it’s uncomfortable for all involved.

When you’re annoying everyone around you – which you really don’t want to do – you’re comparing that to trying to help your team. So, the choice involves securing the approval of strangers or taking care of people who are important to you. It’s easy to see how that one shakes out.

There is one more scenario to keep in mind: the business traveler before you, hollering and gesticulating, is a complete asshole who is unbelievably desperate or as much attention as he can garner. Do anything except ignore him, and you’ll only make it worse … for everyone.