SANTA CLARA, Calif. -- Marc Casto, vice president of Casto Travel,
half-joked that he would have preferred the U.S. attack on Iraq in
December, one of the slowest months for corporate travel.
No such luck.
As expected, said Casto, transaction volume in March, usually a
busy month for business travel, was down about 5% from last year.
All it took was one of the agency's largest clients to change
policy in anticipation of war.
"One single account mandated that employees travel on an
as-required basis, and that has caused the decrease in volume,"
said Casto, adding that the spreading of severe acute respiratory
syndrome in Asian countries is putting a damper on business travel,
too.
The situation at Casto is not unusual. The Business Travel
Coalition, the Radnor, Pa.-headquartered advocacy group, reported
that 21% of companies banned international travel, according to a
survey of 123 companies conducted immediately after the U.S.
invaded Iraq. Two-thirds of companies said they were putting no
pressure on employees to travel during the war.
Domestic travel appears to be holding steady at Chicago-area
agency Bannockburn Travel Management -- which is good news because
travel within the U.S. comprises the bulk of that agency's
business, said chief operating officer Steve Weiner.
However, international travel and the meetings business has
taken a hit.
"My guess is that we'd be up 5% to 10% if the world was doing
fine, " Weiner said.
"We've had a couple of large meetings postponed. A meeting that
was scheduled to be held in Paris will be moved to a domestic
location and a meeting in Hawaii was postponed, too. I'm assuming
that the meeting will eventually still happen because it has
[business value] for the company."
Meetings business also has been affected at Ultramar Travel
Management International in New York. A few high-end, corporate
meetings in Europe are "up for review," said Keith Blumberg,
Ultramar's chief operating officer.
"The companies don't want to cancel those meetings, but they're
being sensitive to their personnel," said Blumberg, adding that the
tentative nature of travel isn't exactly a new phenomenon.
"We've gotten pretty good at rolling with the punches in the
past year," Blumberg said.
Some suppliers are rolling with the punches, too. Weiner said
hotels are "significantly easing off attrition clauses."
"If a company can't fill a block of hotel rooms, there is no
penalty in some contracts," Weiner said. "They're just trying to
get the business right now."
Blumberg, however, said he doesn't encounter flexible suppliers
in every instance, particularly overseas.
"Everyone started out with the approach that they would be
cooperative in an attempt to stimulate business, but things are
tightening up at this point with financial implications becoming
real," Blumberg said.
"Some hotels are now trying to do their best not to give wiggle
room. Mostly, it's happening abroad because they're taking the
biggest economic hit."
Blumberg said a failure to loosen cancellation and attrition
policies during times of geopolitical instability is
shortsighted.
"It's best to accommodate clients even if it takes money out of
your pocket," he said. "We always look to the long term, hoping
that clients give us proper consideration when things get
better."
Regardless, travel agencies and suppliers likely wish more
clients were like Rotary International, which will continue to
travel worldwide, since the humanitarian organization's mission
requires international travel in times of peace and war, said
Robert Mintz, Rotary's travel manager.
"We're an anomaly," Mintz said. "We have very few cancellations
and we're not canceling any major meetings."
Mintz said Rotary, based in Evanston, Ill., has 10,000 travelers
and annually spends about $10 million on air. Rosenbluth
International is Rotary's travel management provider.
"Sadly, we can't float the boat for everybody, but it'd be nice
if we were everybody's largest client," Mintz said.