People were flying, hotels had guests, rental cars were rented, and meetings did not involve Zoom. Industry conventions peppered calendars with projected attendee levels on par or higher than those of 2019.
We know what happens next: COVID-19 made its way from Asia to Europe to North America. By late March, travel was falling rapidly and by April it had halted completely. On April 14, the TSA processed an all-time low of 87,534 travelers through its airport checkpoints – an incredible 96 percent decline from the same day a year earlier.
This unequalled global decline in travel has caused extensive furloughs and layoffs across the industry. Travel suppliers have had to cut costs, all costs, reducing not only payroll expenses, but variable spend across the board.
Airlines shuttered clubs, sent planes to storage, eliminated routes and cut food and beverage to Spartan levels. Routes that remained saw reduced frequencies, and, in some cases, smaller aircraft. Hotels were hit just as hard, if not harder. In late April, hotel analytics and sourcing software provider Tripbam reported more than 30,000 hotels closed worldwide. Rental car demand went the way of the airlines, and rental car companies, too, resorted to furloughs and layoffs, while a glut of vehicles sat unused. Hertz filed for bankruptcy and more travel industry suppliers are likely to follow.
These changes pave the way for some pretty big questions. Where does this leave the travel manager? How has or will travel management change and which changes will be permanent? Are there new opportunities? If so, how does the travel manager act on them?
What follows are some potential answers to these questions, plus opportunities and advice on the way forward.
A Whole New Bag of Tricks
While the events of Sept. 11, 2001 and the intervening decades have spurred improvements in tracking traveler software and communication methods, as well as the rise of risk management providers like ISOS and WorldAware, COVID-19 has proved a total black swan. The swift movement of the virus and its immediate impact left many organizations unable to respond effectively.
Going forward, travel management will once more have to refocus its attention on traveler safety. Travel managers should refine the methods through which traveler information is received and communicated back to travelers. This might include stepped-up requirements (read: mandates) to book travel through approved channels; greater communication about the risk of travel, both in general and specifically to hotspot locations; and clear guidance on how travelers must respond when they become ill – before, during and after a trip.
Alongside this renewed emphasis on safety, travel managers should review their organization’s travel policy and consider instituting a “temporary or pandemic” policy highlighting the short-term changes required to meet the challenges of the current travel environment. Examples of temporary policy changes could include:
•Directives to consult CDC and state health department websites for destination information before planning travel
•Mandates to check with airlines for specific requirements, such as the wearing of masks, and checking the TSA website for changes in security checkpoint procedures
•Statements on expense reimbursement for personal protection equipment, room service meals and food delivery services.
Additional areas to be addressed in temporary policies include treatment of travelers in high-risk categories, travel to highly impacted areas and protocols when travelers become ill. The policy should also emphasize using unused air tickets first. Last, the policy should offer traveler safety suggestions, such as to avoid elevators if possible, sanitize certain high-risk surfaces in hotel rooms and rental cars, and avoid mass transit.
Post-COVID the industry will see smaller airlines, fewer hotels, reduced rental car availability, and fewer travel management companies. In short, existing agreements may not meet current needs. This reality will require travel managers to re-examine preferred supplier relationships and conduct some – maybe many – sourcing exercises. Here are signs and situations travel managers should look for:
The merger, acquisition, or bankruptcy of a supplier. It is important to ask whether the newly constituted supplier will be able to meet your organization’s needs. Do they have the personnel to manage your account? Are they ready to deliver the level of service you and your travelers expect? Can they continue to make investments in technology?
The new route structures and pricing of airlines. Once more, it is critical to look at the supplier not as they once existed, but as they exist today. Do contracted airlines still meet the demands of your organization? Have your travel patterns changed? Are flight frequencies adequate to meet traveler requirements? How competitive are primary routes following the airline shifts? Airfares are likely to increase due to increased costs – consider whether to source in response to increased prices.
The existence of fewer hotels, reduced hotel demand and volatile rates. More and more companies are warming to dynamic pricing as a way to take advantage of rate fluctuations. Evaluate whether you should follow suit. Also ask whether rate caps should be negotiated in high volume locations and whether it is worth negotiating last room availability. While this is not a time to take advantage of hoteliers, it is a time to negotiate a win-win program for 2021 and beyond.
New meeting requirements and support necessary for those meetings. It seems most travel and meeting managers agree: Meeting technologies such as Zoom, Google Meets and Microsoft Teams work well and can replace some meeting requirements. It would, however, be naïve to think face-to-face meetings will disappear from business. Going forward, consider whether you have the best meeting software to handle your meetings. Will meetings be smaller with more modest requirements? Will different venues be more appropriate from those used previously? Will budgets change? Will meeting sponsors be looking for different results than in the past? Continue to ask these questions periodically as the current environment evolves to stay on top of shifts.
A new landscape for car rentals and requirements. It is likely there will be fewer rental car providers in the new travel environment. Suppliers that remain will likely have fewer cars to rent. The travel manager should analyze data and ask: Is my existing provider still in business? Do they have the cars to meet my organization’s demand in the locations important to us? Has our policy changed to encourage use of rental cars for trips where air travel may have been the best option previously? Is it time to source rental car to ensure our needs are met?
There are, of course, many more questions to be asked, and still others which have yet to be thought of will emerge over time. Some questions are particular to a certain organization, its culture and its current mixture of preferred suppliers. Travel managers need to examine their programs, determine the best opportunities for improvement, and begin the process of making any necessary changes now. Some will be temporary, such as policy, while other changes will be permanent.
Now is the time for travel managers to seize the opportunity to use their expertise and be a champion for their travelers and their organizations.
