Uncertainty in the current geopolitical climate is top of mind for travel management companies (TMCs) and travel managers in 2017. While it's predicted that the corporate travel sector will realize modest growth this year, TMCs and travel managers have faced a number of recent challenges, ranging from the new Trump administration travel policies to more frequent terrorist attacks to geoeconomic issues.
Overall, it's too soon to tell what the full impact of many recent events e.g., the travel ban and Brexit will have on business travel. But the sector is already undergoing changes, largely as a response to terrorism, with a heavy emphasis on traveler safety and the paramount importance of communication.
"What we've seen so far in 2017 in terms of the geopolitical climate, there have been more events happening than in recent times," said David Reimer, senior vice president and general manager, Americas, for American Express Global Business Travel (GBT). "You've had U.S. government decisions to enforce new regulations in relation to travel. You've had laptop bans. You're now getting enhanced security procedures, as well as some of the safety issues that we've seen across cities."
But, he said, that uncertainty has also highlighted the importance of corporations working with travel companies.
"There's a need for a strong partnership with organizations that can help them understand how to interpret those changes, what it means for their business and what it means for the travelers," Reimer said.
In its report last year on the size of the market and trends in U.S. corporate travel, Phocuswright predicted that the sector would see 3% growth in the value of the corporate travel market in 2017 vs. 4% growth in 2016.
"It seems to be that corporate travel is still on track to be a little bit better than last year but not growing by any significant margin," said Phocuswright analyst Claudia Unger. "But people are still confident to travel. They know that they have to travel for their businesses to flourish."
However, Unger said, business travelers are more aware of the potential for an incident to occur while traveling, considering the number of terrorist attacks that have recently happened. Yet they are largely pragmatic about it.
Ian Windsor, global travel services director for HRG, said a combination of several recent events Brexit, the new administration in the U.S. and an increase in terrorism has created more cautious business travelers, though he agreed with Unger that they are still traveling.
"We're certainly seeing people are showing a lot more caution than what they've ever done before," Windsor said. "I'm not saying they're stopping travel, but maybe it's like, 'Really, do I need to do that?'"
Reimer has also seen concerned business travelers as a result of terrorism, pushing GBT to place an emphasis on traveler safety and communication.
He cited a recent study that GBT conducted with the Association of Corporate Travel Executives that found 56% of travelers have heightened concerns about personal safety, and 54% of travelers cited new and heightened concerns about travel to and from the U.S.
"This is an absolutely huge focus for us," Reimer said. "I think the geopolitical climate isn't going to change rapidly, and we're really responding in a few ways."
Mainly, GBT is providing clients with technology they can use to track travelers via GPS and to communicate with them.
In recent years, Reimer said, he has seen the field of business travel change toward putting a heavier emphasis on traveler safety.
"It's really evolved beyond pulling a report to see who's where," he said. "We're talking about real-time tracking and real-time communication, so we're continuing to invest in those products and make sure we have the best information that we can, because traveler security and safety is No. 1."
Gabriel Rizzi, president of Travel Leaders Corporate, also said his company is placing an emphasis on the safety of travelers.
"Traveler safety and keeping employees on the grid has been one of the biggest challenges that our customers are facing," he said. "We've got a very uncertain geoeconomic climate that we're dealing with today that puts a lot of companies on the edge when they send employees overseas. So keeping in touch with them, especially with a solid and stable and reliable mobile solution, is really what we get asked for day in and day out."
Travel Leaders Corporate provides a technology solution, Travel Leaders Connect, which enables communication between an agent and traveler.
Today's climate has made companies like CCRA take stock of what they are communicating to their agencies so the agencies, in turn, can keep their clients informed, said chief marketing officer Maggie Fischer.
"For us, it's been immediate and very impactful, because a lot of what we do centers around really backing up our agencies when it comes to communication and process," she said.
CCRA is not only reviewing what it communicates to agencies, but also how often it communicates what have become near-daily alerts on things affecting travel.
"It's one of those things where we're kind of paving the road as we're driving on it," Fischer said. "We're in the same position as our customers in a lot of respects because these things are coming and they're changing almost daily. So we're doing our best to make sure that we're properly staffed, and we're continuing to make sure we're only bringing on people [who] have really deep industry experience so we know how to navigate this stuff."
Terrorism and world events have largely driven the move toward bettering communication and tracking of travelers, Unger said.
"A lot more companies are reviewing their travel risk-management strategies purely because so much is happening in the world, and they need a plan on what to do in case something does happen in a location where they have a business or where they have travelers," she said.
Companies are increasingly looking into "mitigation strategies," Unger said, or what they can do to give employees a sense of safety when traveling.
"It's not always that something has to happen, but just that the traveler knows, 'Yes, my company is there, and they are actually looking out for me,'" she said.
While terrorism has spurred development of better technologies and communication with travelers, the impact of some other recent events aren't as clear.
For example, Reimer does not believe the recently reinstated Trump travel ban will have a large impact on the majority of business travelers. Down the road, though, enhanced airport security, announced recently by the Department of Homeland Security, will likely increase the time business travelers spend in airports. As a result, TMCs and travel managers will have to communicate that to their travelers.
"A large part of it is being proactive, getting the information to travel managers so they can interpret what it means for their company," he said.
Eric Tyree, chief data scientist at Carlson Wagonlit Travel, is monitoring global issues such as travel policies and Brexit, but he said they are slow to produce statistical trends.
"Unless it's something big 9/11, when obviously people's travel plans changed but other things, they tend to take time to manifest themselves," he said. "The patterns you'll see in these things will be much more subtle."
From a statistical point of view, it "really takes time" to know, in any meaningful way, if a policy change or a news event has had a measurable effect on business travel.
Business travelers also tend to be a more resilient bunch than leisure travelers, he said, and are more driven to travel for commercial reasons.
Peter Pincus, chief commercial officer of CCRA, agreed. He called issues such as new travel policies "temporary hurdles," noting that business travel always bounces back.
"Just as occurred after 9/11, business travel is always affected after a major international event or change in government policy," Pincus said. "However, these changes are temporary. Business travelers will always find a way to continue to travel. Technology has made huge advances in the past 20 years, but human interaction is still required."
While Unger did admit that business travel could see a dip because of everything going on in the world today, and a large event, like another world war, could have a much more significant impact, she said she largely expects business travel to continue on as it has been.
"If you look back from the beginning of time, people have traveled and traded, and that has been going hand in hand, really, since the beginning of time," she said. "I really don't see there to be a significant impact on travel and trade."