Travel
Industry Recovery: How Do We Get There?
A Sense of the Industry Report
November 15, 2001
Part
One -- Overview of Project
The tragic
events of September 11, 2001 represented one of the most incomprehensible
acts of evil in human history. For the global travel and tourism
industry it triggered a fight for survival. In support of this
daunting task, the Association of Corporate Travel Executives
(ACTE) conducted a series of Summits in the U.S. and Europe entitled
"Travel Industry Recovery: How Do We Get There?" This series of
meetings was designed to identify business travel industry concerns,
opportunities and strategies for moving forward in the aftermath
of 9/11. Over 700 ACTE members participated in Summits held in
Amsterdam, Atlanta, Chicago, Dallas Detroit, Frankfurt,
London, Los Angeles, Madrid, Newark, Paris San Francisco, Stockholm
and Washington, DC.
As
a result of the US Summit series, the purpose of this report is
to communicate feedback provided by the U.S. ACTE members and
to define programs to be launched in support of their insight.
It represents the voice of U.S. ACTE members and will be shared
with travel industry CEOs, the federal government and the press.
A similar report will be produced to communicate the feedback
of the ACTE European members. ACTE members from both regions are
poised and ready for action.
It should
be noted that while issues may have varied somewhat by city, the
member call for action focused on three major areas:
- The financial
stability of the business travel industry
- Safety and
Security
- The science
of travel management
Individual Summit city reports are available
here.
Part
Two - Major Conclusions of Participating ACTE Members
1. There were
many corporate travel cost reduction trends in the marketplace in
2001 prior to 9/11.
2. The airline
industry specifically, and the other travel sectors more generally,
will likely emerge from this crisis smaller and with higher costs.
3. Rental car,
hotel, travel management companies and other travel industry segments
are all suffering financially from the impact of the terrorist attacks;
more than 500,000 workers have been furloughed to date, with more
to come.
4. Not all
domestic U.S. airlines are expected to survive the coming months.
5. The domestic
U.S. airfare structure requires overhauling with an aim toward simplification.
6. The industry
needs to launch a near and mid-term public relations campaign, to
help get business travelers back in the air sooner rather than later.
7. Airline
system security gaps represent a real concern that is dampening
demand for business travel.
8. Americans
need to find an appropriate and acceptable balance between security
and inconvenience.
9. The efficacy
of consolidating travel activities within a corporation was vividly
demonstrated as management sought to determine the whereabouts of
employees around the world.
10. There is
a need among travel and purchasing managers for efficient access
to high quality safety and security information as a key component
of an internal crisis communications infrastructure.
11. The role
of the travel manager could evolve along more holistic lines wherein
a travel management strategy could be designed to integrate travel
planning, security, safety, technology, communications and human
resources.
Part
Three - Way Forward - Initiatives and Program to Support the Recovery
of the Travel Industry.
1.
Air Transportation System Security Monitoring Process
ACTE will
develop an independent program (CheckPoint) to monitor progress
on commitments to improve security made by airlines, airports
and the federal government. The ACTE Web-based program (CheckPoint)
will provide weekly updates gathered from news publications and
directly from airlines and airport authorities to provide ACTE
members with a one-stop reference to the most recent safety and
security initiatives.
Supportive
ACTE Member Feedback:
- Airline
system security gaps represent a real concern that is dampening
demand for business travel. Travelers notice security process
inconsistencies from airport to airport,
and even at the same airport in different terminals or on subsequent
trips. It is acknowledged that some inconsistencies arise:
1) from lack
of adequate security force training;
2) because
airports may implement higher standards than those required by
government; and
3) because
the FAA is issuing new directives at an accelerated rate since
9/11
-
An area of paramount concern is the almost non-existent scanning
of baggage for bombs.
-
Although the question of whether or not to federalize airport
security screeners as a necessary condition for rebuilding the
nation's confidence in the airline industry was met with mixed
responses, it was agreed that the important issue is that of qualifications,
stringent background checks, training and the establishment and
adherence to operational guidelines. (Note: A bill has since been
passed that addresses these issues. It will be tracked and monitored
by the ACTE "Checkpoint" program).
-
Through federal legislation, Executive Order or FAA directive,
many security improvement
promises will be made to the American public. It is believed that
all responsible should be held accountable for their respective
commitments.
2.
Communication Between Federal Agencies and Major Buyers of Air 'Transportation
Services.
ACTE
will develop a recommendation to the federal government to establish
a program wherein major customers
of the air transportation system and government agencies
meet monthly to share information on a first-hand basis.
Supportive
ACTE Member Feedback
- Federal
agencies that would assign representatives to the forum could
include the Office of Homeland Security, the DOT, FAA and organizations
to be created, pending legislation. The forum would be established
for a one-year period after which a determination would be made
with regard to the efficacy of continuation.
- ACTE members
are willing to assemble, analyze and share valuable reports with
the government in order to provide the various agencies with documented
factual information on which to make decisions.
- ACTE members
are willing, through such a program, to serve as a sounding board
for new ideas.
- Members
would benefit from first hand, unfiltered information regarding
federal programs and policies that are being implemented, or considered,
to improve airport and airplane security.
- The
Federal Government would benefit from securing high quality, aggregated
feedback and input from seasoned travel/purchasing managers, as
opposed to relying on antidotal reports of frustrated travelers
in the
press.
3.
Direct Communication between Buyers of Air Transportation Services
and Local Airport Authorities.
ACTE
will develop an initiative that will encourage travel and purchasing
managers to become involved with their local airport authorities
and represent the interests of their travelers.
Supportive ACTE Member Feedback:
-
In
the aftermath of 9/11, business travelers
are more observant of and outspoken about airport security.
Travelers are reporting much inconsistency in airport procedures
and perceived quality of effort.
-
In
areas where they do not already exist, travel and purchasing
managers should encourage the creation of advisory boards comprised
of large corporate purchasers of air transportation services.
Where they are already in place, travel managers should endeavor
to join them.
-
Travel executives should seek to influence airport policies
regarding security and the attendant tradeoffs with traveler
convenience.
-
Like
government at the federal level, local airport authorities would
benefit from
customer's input as well as customer's support for new airport
policies and programs.
4.
Traveler ID Program
ACTE
will convene a coalition of industry stakeholders to further explore
the benefits and risks of the immediate development and adoption
of traveler ID technology in order to heighten
security and reduce security check-in times for business travelers.
Supportive
ACTE Member Feedback:
- Customers
of the air transportation system have an opportunity and vested
interest in joining other industry and government stakeholders
in supporting a technology solution for the problem of long security
lines.
- Currently
extra security-related time at the airport is having a damaging
impact on short haul air transportation markets as some travelers
opt to travel via automobile.
- Some
corporations are leasing buses for use in heavily trafficked short
haul markets.
- Some
ACTE members favor the issuance of a federal ID card whereby backgrounds
would be thoroughly checked and a biometric chip would provide
a hard match between card and person.
- Some
ACTE members want more information before they are willing to
support a program that corporate travelers may believe is evasive
to their privacy.
- This
type of technology would dramatically speed up and improve security
processing.
5.
Broadened Strategic Role for Executives Responsible for Travel Management
ACTE will develop a business case rationale and documentation
to advance progress toward a broader strategic role for executives
responsible for travel management.
Supportive
ACTE Member Feedback:
- Corporate
professionals, who are responsible for travel,
received much corporate visibility and recognition during the
9/11 crisis for a job well done. This senior management focus
on the management of travel has created an opportunity for travel
managers to add greater value to their corporations by redefining
the scope of their contributions.
- Traveler
safety, security and communications are now top priorities.
- There is
a sense that the business travel function now needs to be managed
much more holistically. Travel managers have the opportunity to
make a business case that they should coordinate a far broader
business travel strategy that includes safety, security, communications,
technology, HR, m-commerce, car fleet and corporate aviation.
6.
U.S. Airline Industry Airfare Structure
ACTE
will convene a working group of travel and purchasing managers
to develop a recommendation for a simplified domestic U.S. airfare
structure.
Additional
ACTE Member Feedback:
- Now
is an excellent time for airlines to rethink their domestic
U.S. airfare structures. If the airline industry is going to emerge
from this crisis smaller, with higher prices,
then the industry should take this opportunity to provide a fare
structure that will enable all parties to operate more efficiently
and productively in the future. · Corporate travel executives
seek a simplified, rational airfare structure that they, their
travelers and their senior management will be able to understand
and embrace.
- Corporate
travel executives seek to be in a position to articulate to senior
management ideas for comprehensive strategy in support of the
airlines'
attempts to jump start business travel with the following message
points:
1) Impact
of a failing airline industry on the economy, airline competitiveness
and future
ability to conduct business.
2) Short
and long-term measures underway to improve airport and airplane
safety
3) Federal
government short and long term measures underway to combat terrorists
and improved intelligence gathering.
4) A coherent,
simplified airfare program that works for both buyer and seller.
- Airlines
seek an airfare structure that would allow sustainable profitability
over time.
7.
Public, Industry and Government Relations
ACTE
will explore the development of a coalition of parties interested
in funding and implementing a travel industry public relations
campaign designed to generate significantly higher levels of leisure
and business travel.
Supportive
ACTE Member Feedback:
- The campaign
must be hard, fast, and have measurable objectives for increasing
business and leisure travel on airlines over an 18-month period.
- There is
a need to launch a near and mid-term public relations campaign
that is clear and fact-based. Travelers are receiving mixed and
confusing messages from the federal government and the national
media.
- A successful
program will allow travelers to put the risks and rewards of travel
into proper perspective and make informed and rational judgments
with regard to travel plans.
- Such a campaign
is seen as required to shorten the amount of time it will take
for industry recovery.
8.
High-Speed Rail Program
ACTE will
convene a Task Force of corporate travel buyers to research and
recommend a public-policy position with respect to high-speed
rail programs.
Supportive
ACTE Member Feedback:
- If there
were another major domestic U.S. terrorist-related airline disaster,
the impact to the U.S. economy would likely be devastating.
- The U.S.
economy is supra dependent on the national air transportation
system for the conduct of commerce.
- Europe has
a well-developed high-speed rail network. Such a balance between
air and rail transportation enjoyed by Europeans could buffer
the impact on commerce from 9/11-type tragedies.
- The U.S.
needs to take action to guard against such economic calamity that
could result from further successful transgressions against our
air transportation system.
Founded in
1988, the Association of Corporate Travel Executives is the only
organization wholly dedicated to the science of business travel
management with an international constituency. ACTE membership totals
more than 2,400, including entities in Asia, Europe, Canada and
the United States. The organization is headquartered in Alexandria,
Va., and its web site is www.acte.org.
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