Craig Banikowski, president of the National Business Travel Association, describes the expression "new normal" as "a parking garage to describe a lot of change."
To characterize current attitudes and behaviors as a new normal, he said, would be to settle in with a collection of new assumptions that probably won't be valid for very long either. Banikowski prefers to refer to a "rolling normal."
The fact is that the Great Recession is only one factor in driving change in this past year and for the future. Two other factors will be more important in the long run: continued rapid changes in technology and the changing nature of travelers themselves.
There is a fourth factor, too, though in the long run, it will fade: the huge dust-up in the news media about corporate meetings and incentive trips. The prospects for a faster recovery in this segment are good. The exception is the corporate sponsorship of high-end vacations for execs disguised as business meetings. Those events won't resume at the former pace, and that means pain for a select segment of suppliers.
Nevertheless, the recession has been the central feature of the past year. It has produced some changes that will stick, in the view of close observers.
Brian Hace, vice president of client services for Carlson Wagonlit Travel North America, said there is a different tone today in the way travel managers and travelers consider travel purchasing. Corporate executives have shifted focus from merely negotiating the best hotel or air prices to understanding when and how travel provides a sensible payoff.
It's true, Hace said, that corporations these days are looking at travel more as an investment than as an expense and are a lot more interested in calculating the return on that investment.
Herve Sedky, senior vice president and general manager for American Express Business Travel, said discussions with customers are "more intelligent" these days as those customers strive to determine when travel pays off and when it's a waste. He noted that Amex research shows a positive correlation between travel and business results, but "like cholesterol, some is good and some bad."
The focus on return on investment is the big, recession-driven change that is likely to stick.
That is not to say travel spending won't pick up or that travelers won't gradually move back into first-class or business-class air seats. In fact, Hace said, that is already happening. He expects business at the front of the plane to recover, particularly internationally, in the next 18 months. But he is not quite so optimistic about top-of-the-line hotels, because the differences between each type of accommodation are not as obvious as they are on a plane.
He said internal company meetings are beginning a recovery, and he sees meetings essentially recovering in the next year. Much the same applies to incentives, which are really part of a good performer's compensation, he said.
Sedky said he has not seen an uptick in travel buying yet, but to a point, there is a correlation between comfort and productivity. At the least, he said, that fact argues for taking particular care of travelers who accept tough travel-and-work combinations, such as nighttime, long-haul flights followed immediately by meetings. He said he expects clients to restore upgrades in travel based on "granular assessments."
Besides, he said, things can't stay as they are today. Travelers are willing to trade down now, Sedky said, because they understand they are saving jobs.
However, he added, "As the economy gets better, companies need to focus on retention, especially of top performers."
Banikowski said the new focus on ROI puts travel managers in a "good place." He believes that, going forward, "there will be baseline expectations for a travel manager to provide metrics on how a program is performing."
But he added that he and his counterparts can help with ROI only if they are aware of the employer's strategy. It makes sense to negotiate with suppliers based on projected business travel plans, not on historical data, he said, so CFOs and others need to include travel managers in strategic planning.
The culture might have changed, but companies are loosening their belts to some degree now, he said. He predicted that meetings and incentives will be back "sooner rather than later."
"Companies cannot cut the travel out," he said. "You can have virtual relationships, but nothing replaces the physical connection."
On the other hand, he said he foresees a permanent shift to the use of virtual meetings as a way for colleagues to get together. But "that will help people do more business," and because there is more business, the travel activity -- even if it accounts for a smaller proportion of all get-togethers -- could increase. Just as computers did not eliminate paper, Banikowski said, virtual meetings won't eliminate travel.
Indeed, Hace said, virtual sessions aren't necessarily meant to replace travel. At times, they might be replacing conference calls or Webex sessions to provide efficiencies that enable business to be accomplished faster.
It depends on the business though, and Cisco Systems is a case in point. The San Jose-based network specialist rolled out Cisco TelePresence in late 2006, a technology package that supports virtual meetings.
According to Jacqueline Roy, corporate communications manager, the company now counts 500 customers who have among them installed 3,000 systems worldwide. Cisco has 650 systems of its own globally.
This year, Roy said, the company is on track to spend about $250 million on travel, down from $750 million in 2008. Cisco is unique, however, in that all its existing customers have TelePresence installations, and Cisco has good reason to want to show off what its product can do.
It remains to be seen as the economy recovers how definitively Cisco has replaced personal meetings with virtual ones or, put differently, how much the changed behavior was driven by the economy and how much by technology.
No one argues that virtual technology will eliminate travel, but it's a reasonable expectation that with improving technology in hand and more to come, some part of the shift to virtual options will stick.
Amex's Sedky said that for one thing, as the technology improves, people are becoming more comfortable with it, and "some travel should become virtual." It is Amex's job, he said, to assist clients in meeting with business associates, regardless of the method.
That's why, he said, Amex is making the effort to develop its "decisioning tool," essentially a set of questions customized to the corporation that lets the travel counselor assist a client in deciding whether to book a trip or a conference room. Currently, the tool is available when Amex counselors take client calls, but it is not yet in the online booking tools, Sedky said.
With or without recessions, technology development continues apace, but when the two converge, change comes faster. Virtual meetings are only one example of that.
Tony D'Astolfo, vice president of worldwide sales for Rearden Commerce, a vendor of technology for the corporate travel market, recalls that the 2000-2001 downturn was the "biggest boon" to corporate online travel systems. "Adoption was booming because it was cheaper."
The current, deeper downturn is driving companies toward more electronic solutions to manage information and expenses and even manage the ways they share information, he said. As a result, D'Astolfo said, Rearden sees more customers this year adopting Rearden's view that every type of service used by a business traveler should be managed. Rearden provides a platform that accounts for ancillary spending categories as varied as conferencing, dining, rail and shipping.
D'Astolfo said the next iterations in time efficiencies and information management would be the further adaptation of mobile technology and social media.
With a mobile strategy, he said, relevant flight information can be pushed to the traveler while he or she is on the road, and this will become transactional, whether for rebooking a flight or making dinner reservations.
Social media, he said, provides a way for managers or service providers to collect immediate feedback on travel experiences.
D'Astolfo said the technology would be developed regardless of the economy, but the recession pushes more people to adopt it when they see efficiencies or cost savings. Once adoption occurs, he said, the new behaviors will be permanent. Until the next new thing comes along, that is.
Within fairly short order the Internet, then mobile technology and social media, have entered the mainstream and have produced a younger generation of travelers who grew up with these media.
They also bring their own priorities to the travel experience. Sedky said the industry has to adapt to this change in the workforce. He said Amex has made investments to adapt its technology for the "plug-and-play environment" for greater flexibility in offering meaningful solutions for younger travelers.
Banikowski said that for travelers in their 20s and 30s, "First class may not matter as much as WiFi in the air and a little more legroom."
It's safe to assert that companies, once they've seen the payoff in smarter travel management, will continue assessing travel spending through the ROI lens. It is even safer to predict that once new technology is introduced, there is no going back.
However, when asked how the younger generation's travel patterns will evolve and thus further reshape the "floating normal," his crystal ball shuts down.
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