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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