It changed everything. That is the nature
of extraordinary events. For decades after the bombing of Pearl
Harbor, on Dec. 7, 1941, the date lived in infamy. Stories would be
told and retold of where people were when they heard the news.
Later generations would feel the same way about the assassination
of John F. Kennedy, the first moon landing and the day the Berlin
Wall came down.
Sept. 11, 2001,
was such a day.
In addition to
the lives lost, the pain, the grief, the physical damage, property
loss and the financial impact, 9/11 changed the worlds of politics
and diplomacy, security and law enforcement, the military and
commerce of all kinds. It affected the way some of us view
religions and religious tolerance, or the lack of it. It changed
our government's attitudes toward security and war and prisoners of
war. It led to war.
In light of those
sobering realities, is it hubris to ponder how 9/11 changed this or
that business? Is it wrong to take such a narrow view of
catastrophe? Of mass murder?
It might seem so
at first, but the travel business was both the instrument and the
first victim of the attacks and, as recent events in London have
demonstrated, it remains a prime target.
So we have the
right to say it: 9/11 changed the world, and it changed the world
of travel.
It put a stop to
all air travel in the U.S., triggered a travel recession and led to
the worst string of airline losses in the industry's history,
resulting in the bankruptcy of a half-dozen airlines and the
weakening of most of the rest. By one estimate, the U.S. airline
industry has collectively lost more than $50 billion since
2001.
The Air Transport
Association reported that in the first year after 9/11, nearly half
of the jobs lost in the U.S. were in aviation, travel and
tourism.
Five years later,
9/11 continues to encumber our airports with security procedures
that raise the cost of travel and thereby inflate the cost of all
goods and services that depend on travel. The ripple effects
extended to every corner of the industry and beyond.
Is it even
possible to look back and assess the impact of such
events?
Past and future
Aymara, a Native
American language spoken in the Andean highlands of South America,
interests linguists and cultural anthropologists because the
language links the words and concepts of front and back and past
and future in unique ways.
In most Western
languages, the past is spoken of as something that is behind us.
The future lies ahead.
In Aymara, when
you look "forward," you are not peering into an unknown future, but
into the present and past,
to things that have come about and that have left their mark on the
world.
The future, on
the other hand, is understood to be something behind us, unknown
and unseen, not yet arrived, not yet observed.
It seems odd to
think of the future as something that is "behind" us. That would
suggest that we're walking backward into it, or that it overtakes
us from behind and leaves its mark on the world before us. But
maybe that's not a bad analogy to keep around for times like
these.
Past and present
While the effects
of 9/11 are incalculable, the consequences for our industry have
been, for the most part, manageable.
Threading through
these reflections and comments from travel businesspeople are
several common themes -- that we have changed; that our businesses
have gotten stronger; that travelers have become more resilient;
that certain economic trends have been heightened and accelerated,
and that certain fundamental truths
have not changed.
There is a sense
that maybe we have prevailed.
The pain of 9/11
is part of a parade of events that have made us what we are and
have made the world what it is. They have helped to make today's
travel business and today's travel experiences what they
are.
And to the
Aymaran way of thinking, we will never get "beyond" 9/11, and it
will never be "behind" us.
The events and
consequences of that day are real and ever present, part of the
fabric of the world we see. The past is, in a sense, right in front
of us.
Richard
Copland
The CEO of
Hillside Travel in Bronx, N.Y., Copland was president of ASTA from
2000 to 2004.
On 9/11 at 8:30 a.m., I was at Newark
Airport on a plane bound for California. Since all the planes
involved were headed for California, I guess it was my lucky
day.
The most
immediate effect on business in general was getting stranded
clients home from all over the world. Additionally, there was
little to no new business for the next several months.
There were many
immediate effects on me as ASTA president. One was trying to be a
calming influence on travel agents and the traveling public.
Another major effect was great concern for member survival in the
absence of business.
The sale of
airline tickets became irrelevant. Travel agents had to change from
being ticket-takers to business people. Specialization for travel
agents became very important, and service fees became the norm in
the industry. Agents downsized the number of employees, charged
service fees and focused more on selling packages, tours and
cruises.
Travel agents
have survived the negative effects of 9/11.
The major lesson
learned is that terrorism can strike our shores with devastating
effects. However, the American public will not sit home and cower,
but will continue to travel.
Rod
McLeod
McLeod was
the president of American Classic Voyages, which declared
bankruptcy shortly after 9/11.
9/11 set off a Darwinian process, and
American Classic Voyages wasn't among the fittest. It didn't have
the financial stamina. Renaissance didn't have the financial
stamina. Those companies didn't fail because of bad ideas. We were
over-leveraged.
American Classic
Voyages was a child of what former Federal Reserve chairman Alan
Greenspan called "irrational exuberance," and 9/11 was the end of
that irrationality. At the time, companies left and right and were
paying people off in stock. That highly speculative environment is
gone from the business.
The airline
business today is far more rational than prior to 9/11. There was a
point in time when for an airline to be successful, they had to be
everywhere. They've gotten far more rational.
9/11 accelerated
a lot of things. Look at consolidation. The cruise business,
airline business, lodging business, car rental business -- how are
they all different from that time stamp that is 9/11? In virtually
every one, you've seen significant consolidation. It's been
huge.
In the cruise
business, it prompted creativity in dealing with some consumer
issues that came out of 9/11 -- not the least of which was airline
security. The whole trend of home-porting came out of nowhere. It
would go under the broad banner of "necessity is the mother of
invention." All of a sudden there are ports like Baltimore and the
resurgence of New York as a cruise port.
The industry came
out stronger. It found a way to prosper in a very challenging
world. There are a lot more cruise ships now than on 9/11 -- the
industry not only worked its way through, but it has
grown.
Adam
Aron
Aron is the
chairman and CEO of World Leisure Partners and was CEO of Vail
Resorts.
On 9/11 I was at the Essex House hotel in
New York, preparing to go to a 10 a.m. board meeting of Vail
Resorts. Needless to say, the meeting did not take place. Like
everyone else, we were more or less stuck in Manhattan. I remember
I was on the third United flight out of LaGuardia the following
Saturday.
My first reaction
was for our country, and as I watched the towers fall, I remember
thinking life could be very different in the U.S. Unfortunately,
that has turned out to be accurate. Five years later, we still have
armed forces overseas, with no easy end in sight, and a world in
which threats against travel are still very much a real phenomenon
to deal with -- for example, the threatened attacks on
transatlantic airliners in August.
As for the travel
industry, since not an airplane was moving in the U.S. immediately
afterward, it was obvious the travel industry was going to have a
severe problem to cope with a dramatic drop in demand. At the same
time, I remember writing to our employees that I was confident the
industry would bounce back because travel is not a luxury. It is a
basic need of the human psyche, both to conduct business and to
enjoy life.
I could not be
more confident today that travel will be a growth industry for
decades to come in the U.S. and around the world. The impact has
been less severe than what I first thought it might be.
At Vail Resorts,
we had the benefit of a few months' times before the peak Christmas
travel season, and we had a relatively normal ski season in the
winter of 2001 and 2002. Ironically, it was the following winters,
2002 and 2003, that impacted the ski industry because of the
outbreak of the Iraqi war in 2003.
That year, the
build-up to war took place during ski season, and the outbreak of
war occurred in March. So that was the year we were affected more
than in 2001.
But, like many
other parts of the travel industry, Vail Resorts had great years
the following three years in a row, and if you look at the rest of
the travel industry, I think you are seeing the same thing. The
cruise industry is strong, the hotel industry is strong, tour
operators are strong.
The only part of
the industry that has not bounced back quickly has been the airline
industry, and that has less to do with 9/11 than with the rising
cost of fuel -- which, of course, someone could say is itself the
result of 9/11.
Lynne
Biggar
Biggar is the
senior vice president and general manager of American Express
Travel.
On 9/11, I was at American Express'
headquarters at 3 World Financial Center. My office faced the North
Tower, and I was getting ready for a pretty important 9 a.m.
meeting when the plane hit the North Tower. I didn't know any of
those who died on that day who were American Express employees ...
we have a lovely memorial in our lobby.
I would say
business was tough after 9/11, as it was for everybody. Our
card-member base really turned to us because they trusted us and we
would help them and provide security.
It also really
helped us define our focus in the consumer travel business. While
travel was reduced, people still had a desire to travel and
experience luxury. Things like the private jets, private villas
came to pass. There was more focus on family travel, experiential
and cultural travel, really having greater understanding of the
place.
I think there are
some obvious things here. No. 1 is consolidation. Having a unique
selling proposition in the market will continue to be important, no
matter where you are in the distribution chain.
Obviously the
expansion of the Web.
And I'd just say
the increase in consumer choice, which puts more control in the
hands of the consumer. I think there's a reawakening of the travel
agent as a group of experts and trained individuals who can enable
the kind of experiential vacation, which requires a little more
planning than I think most people are game for.
I think these
trends would have happened anyway. But I think 9/11 was a jolt that
made it happen more quickly.
So from a
business strategy perspective, I think the first and foremost thing
was we've all awakened to a need for flexibility, the need to react
to external events more quickly -- SARS and tsunamis and terrorist
events and how the industry has really been able to react. From a
company management perspective, there is the importance of business
continuity planning. There's a specific plan in place for how your
business will recover and conduct itself in any sort of event.
We've spent a lot of time honing those plans.
I guess we all
wish we had a crystal ball. But I feel good about the future. The
outlook for the future is strong. There is an increased desire for
unique travel.
Marilyn Carlson Nelson
Carlson Nelson is CEO of Carlson Cos.
On 9/11 I was working in my office in Minneapolis.
One of the greatest lessons learned from 9/11 is just how connected the world is today, in ways we never dreamed of just a decade ago.
Imagine: This connectivity allowed a relatively small group of plotters living in caves in Afghanistan to reach across the world and deal a blow to the largest economy in the world. This fact begs for corporate leaders to take heed of their actions not just in their home country but in countries that are seemingly (but not at all) remote.
Another lesson learned -- one we all too soon forget -- is the unifying spirit that spontaneously appears in times of adversity. I think back to how our Carlson teams across the world handled the crisis, staying up nonstop to find lodging or transportation for stranded customers, even helping our competitors' customers. Without a second thought, our Regent Wall Street Hotel opened its doors to those harmed and those trying to rescue them.
We are all stronger together than apart; we must remember that always.
We have learned that free people, especially Americans, are resilient. The recent airline terror plot in the U.K. disrupted us briefly, but within days we adapted and continued on with our lives. Terror cannot defeat those who refuse to be terrorized!
Doug Parker
Parker is president and CEO of US Airways Group.
I had been president and COO of America West, and was named its CEO Sept. 1, 2001.
At the time, I told the board I know I'm ready for this; I also said the one thing I haven't done much of is government affairs, but we have a strong guy that does that and I have time to get on my feet on that. But then Sept. 11 happened, and the next thing I knew I was spending the next three months in Washington.
Early on, it was all about survival. But most of us in the U.S. airline industry were thinking: Let's make sure we get legislation to get through what we believed would be a temporary downturn. Most of us thought in six months people would be flying normally and paying the air fares they were paying before.
But the impact of 9/11 highlighted a lot of the problems the industry already had and accelerated the need to address those. For example, once demand fell off like it did, it highlighted how much excess capacity there was, and we had to respond with less capacity. It accelerated dramatically the restructuring that would have happened anyway.
The airline industry has lost about $40 billion since 2001. It weakened the industry but forced us to respond, and got us in a way to a business model that is much stronger. All of us reduced our costs and have fewer seats flying around. The balance sheets are much worse, but the operating cash flows and the future, potentially, of the airlines is much stronger now than it would have been otherwise.
Mark Conroy
Conroy is president of Regent Seven Seas Cruises.
I was in my office in Fort Lauderdale. As soon as we learned they were shutting down all flights, we called the ships and gave them a heads up. For those that were in the middle of a cruise, we sent what info we had and began trying to enable every guest to contact their families. In those days, the cell phones and ship satellite systems were not as robust as they are today, so the system was almost immediately overwhelmed by call volume. It was amazing how many guests had relatives in either the Pentagon or the World Trade Center. To keep the lines open, we volunteered to collect contact info for the guests and e-mailed it to the office. Then staff members began to call family on behalf of the guests.
Travelers are much more resilient. If the events last year in London and the year before in Madrid had happened prior to 9/11, you would have seen massive cancellations and people not going anywhere. We haven't seen any drop-off at all. Feedback isn't "I'm afraid to fly." It's just that flying is going to be a bigger hassle.
That's a positive thing. What's happened is people have gotten used to putting things in proper perspective. The media are still trying to scare people to death, but people are more resilient and put everything in perspective.
In my case, the Gulf War, while not as traumatic as 9/11, was just as bad, if not worse, for business. 9/11 hurt terribly, but it was late enough in the year for the Europe season to be over. Then in '02, we saw our business recover, only to be hurt in '03 with the war. It was the period after 9/11 that people were more sensitive. But the war in Iraq hasn't inhibited people from travel, even to the Middle East. Our world cruise goes to Dubai and the Suez.
The American psyche related to travel has changed.
After the terrorist attack on the Achille Lauro in 1985, we had security processes already in place. If nothing else, it just kind of improved. We also took advantage of one of the nice things about cruise ships -- they can move. We are able to relocate. Homeport cruising really started as the mother of necessity and as a result of the effect of 9/11. It would have developed anyway over time, but it spurred it on and made it happen.
A big impact was further screening processes and new rules with homeland security and passports and additional security. Since 9/11, crews in the U.S. and crews in general have to provide the most updated guest list, including passport number and guests' origins so the Department of Homeland Security can run it through their system. I always joke that if you're a convicted felon you wouldn't want to go on a cruise.
I think consumers are still interested in destinations, and that's the critical issue for us in the luxury segment -- the wanderlust, the places people want to visit. The ability to travel as freely as possible and to travel as unencumbered as possible is still as important. The difference is customers don't overreact and cancel if something happens. The reluctance is the hassle of security more than safety.
An observation that has nothing to do with 9/11 but has happened since then is that when I'm in Europe, I notice that America is less popular than it used to be. The good news is people have been able to separate dislike of America and Americans. We are some of the easiest-going and highest-spending travelers in the world, so they love our presence -- we want the best and are willing to pay for it.
Mike Stengel
Stengel is general manager, New York Marriott Marquis and area general manager, New York City Marriott Hotels.
On 9/11, I was the general manager of the New York Marriott Marquis in the Theater District. My boss, who was responsible for the Marriott World Trade Center, and I were both in London for a meeting when we found out about the attacks. We got on the phone just when it was happening, and we kept the line open for, I would say, two days because we were afraid we'd lose phone contact.
The hotel's managers decided to evacuate the hotel because something had penetrated the roof. That probably was a God-send because it got us to get everyone out of the hotel. After the hotel was completely evacuated, the fire department took over the first floor as a refuge area. They were using our fire command station to communicate and coordinate with other firefighters.
Our director of the World Trade Center sales office had an eight-months-pregnant sales manager up there. Due to the fire emergency, the only way to evacuate the building was by the stairs. So they decided soon after the first plane hit that they would evacuate immediately since it would take a little while to get down. Miraculously, all of Marriott's guests and all but two employees survived.
When the towers collapsed, they collapsed on our building. The pressure kind of blew everyone in the lobby out onto the street. But we had two managers still inside -- Joseph Keller, head of housekeeping, and Abdu Malahi, the AV manager. When the first tower collapsed, Joe was helping an injured firefighter and a police officer into the bell closet, where we keep luggage, and he was communicating on a Nextel wireless conference call that they were safe. They didn't realize that the building had collapsed on top of them, nor did they know that the second tower was about to collapse on top of them, too.
Then the Nextel line on the conference call went silent.
Gloria Bohan
Bohan is president, CEO and founder of Omega World Travel.
I was in Ireland on 9/11, playing golf at the Tralee Golf Club with a group of golfers. It was a beautiful, sunny day. I came back to the U.S. several days later, not knowing quite what to expect.
It is a brave new world for travelers now. After the attacks, with the airlines having so much trouble, we saw so much need from customers asking for help. It was as if we had changed from a travel management company negotiating air fares to something more. It became "What are you doing to help protect us because we have to travel?"
On the security side, just keeping people advised on new security regulations has forced all agents to communicate better and in different ways. We're more a part of that Blackberry culture now, and we are acting more like consultants, offering help instead of just acting as a travel manager. A whole different realm of issues has emerged over these past five years.
Sept. 11 occurred as we were seeing significant growth of the online travel agencies, with the purchase of airline tickets becoming commoditized. But with the need for customers to make changes because of airport delays or being shut down over security incidents, even the online agencies saw that they could not be just an online portal, and they morphed into something more like full-service agencies. Even customers going online see the need for more services, and I think that is one post-9/11 development that will continue.
We still see crowded planes and security problems, and whether it is a terrorist plot in London or a hurricane in the Caribbean, we know we have customers who want more help. People are feeling a need for the personal touch to help them wade through the inconveniences travel presents. International travel, in particular, has become a very big deal. Online products are very confusing, even for my sharpest customers. So, we are doing a lot more personal service, finding the appropriate car service, the good restaurant or where to go for business services in Brussels, for instance. We have gotten more and more of that. Things have changed. It is a very new, very dynamic environment since 9/11.
Ian Swain
Swain is the president of Swain Tours.
[Five years ago,] I was running the Pacific region for Far & Wide [Swain Tours' parent firm], and our destination had a flow of people coming down who didn't want to travel to Europe [following 9/11]. The South Pacific was deemed safe early on, and 2002 was the best year Swain ever had.
It continued into 2003. Had the Far & Wide bankruptcy not occurred that year, we would have been on line for another record year.
Back in 1999, when I sold to Far & Wide, I believed that it was a good model and would take travel to another level. For a number of reasons, 9/11 being the major one, it failed.
I was not closely involved with the financials of Far & Wide, but there's no question 9/11 had a big effect. They had a couple of large companies fail in Europe. People didn't want to go to Europe for a while. We knew because we were getting people who had been booked to Europe who wanted to transfer to the South Pacific.
When the Travel Corp. bought Swain [after the Far & Wide bankruptcy], they kept it completely separate, and allowed it to grow again. I bought back my company from the Travel Corp. this summer. But if I didn't announce the sale, nothing would be changed. I was running the company anyway.
Into '05 and this year we're on a growth pattern again; 2006 is very close to 2002. Looking at forward bookings, 2007 will be a banner year for Swain.
We didn't even get a call about the recent [foiled] Britain hijacking plot. Our customers didn't even question it. They just said, "That's fine. We're going." I think the majority of Americans are getting used to it and are not going to be swayed by things going on, like they were with 9/11. It was a huge wake-up call for everyone.