The Path Back to Business Travel

EAB vice president of business solutions Steven Mandelbaum and Otsuka U.S. senior corporate travel manager Danielle Amoroso tell how their midsize programs are forging the path back to business travel. Both spoke with BTN editorial director Elizabeth West as part of a new podcast series. The following is excerpted from those conversations.

BTN: Pharmaceutical and health care are among a handful of industries that continued to travel during the pandemic. Is that true for Otsuka?

Danielle Amoroso: We did go through a period where we completely halted travel. That was during the period when many of us were under full lockdown. … At this point, we’ve opened domestic travel for all employees, but we are asking them to follow "business necessary" guidelines. We took away that "business essential" term—we heard that term a lot with the restrictions—and shifted that mentality to "business necessary." If the meeting can be virtual, by all means do it. Travel isn’t mandatory and is based on individual comfort. 

We are still not permitted for international travel, but our domestic travel has nearly gone back to 2019 pre-pandemic levels. 

BTN: I assume EAB might be different.

Steven Mandelbaum: In 2020 we had let’s say zero travelers, but in a normal year we have about 500 or 600 travelers. In early June we started our "soft restart." It’s all partner-facing—our customers, we call them partners—and it’s 100 percent voluntary for those who would like to go. We currently require that our travelers are vaccinated.

BTN: That’s an interesting detail. Was that a decision made with HR or other executives?

Mandelbaum: It was a baby step. We said, "What is the safest we can do this?" As we get more comfortable, we can peel the onion back and start to allow broader things. For now, its partner-facing only with vaccinated travelers only. 

BTN: The two of you are in quite different places in terms of timing and volume on return-to-travel, but I do think that you’ve had similar approaches in how to rebuild. You both started small "programs" or pilots to test out the situation. 

Amoroso: We started with hotel overnight stays … and identified a group of field reps who had a need to stay overnight. They were driving their own vehicles, but the [target] location was three or four hours away. We trained this group from start to finish: how to book the reservation—because we had closed our online booking tool—how to act in the hotel, social distancing, what to do if there were no dining options available. Everyone who participated in the pilot had to fill out a [post-trip] survey: What was the comfort level? How did the hotel perform? Was everyone following the [Covid-19] procedures like masks, social distancing and keyless entry? The surveys came out very positive. 

It created this framework of a training platform that we were able to use long-term and apply as we opened other areas of travel. Eventually we had the data to earn the confidence of our executive team that we could slowly get back to a normal state of travel. That systematic way of doing it made our employees feel confident and safe getting back out there. 

BTN: What about your method, Steven?

Mandelbaum: We leave [the decision to travel] up to the discretion of the individual traveler. Once you’ve opted into the travel restart program, you decide which trips make sense and go for approval within your business unit. Generally, we trust our people to make the right decision. We [also] survey every traveler—that’s mandatory now. We’ve never done that in the past. We aren’t surveying about the suppliers, though. We want to know whether the trip was worthwhile. Like most organizations, we are trying to determine when the in-person [interaction] makes sense and when it doesn’t. Almost every trip, people say they are glad they went and that they accomplished more than they would have over Zoom or something like that. 

BTN: Do you see any evidence that the cessation of business travel put a cramp on your company?

Mandelbaum: Not really. But that was a non-normal time. It wasn’t that everyone else was out there. Everyone was hunkered down not going anywhere. A lot of schools and campuses closed—not all but a lot. It was just an atypical period. We were very successful at serving our partners during this period, but we’re into a new phase now.

BTN: Steven, you mentioned some dynamic decision-making taking place on how to expand the program. You also mentioned internal travel might open soon. 

Mandelbaum: At some point we want to go back to how we traveled in the past. We may not take every trip we’ve taken in the past, but the use cases of travel are the same: going to see your partners, going to have internal meetings, specifically with other offices or people working remote. The framework now is whether people are comfortable, what the public health conditions look like and when can we restart some of those things. 

Like right now, we are doing partner travel but just a little. But it’s making a huge impact. Can we expand that to internal travel? And what are the parameters for that? How many people are OK to get together? We plan but then something happens. We thought about broad re-opening of the office but then the delta variant happened. It is hard to plan far into the future. 

We talk about a lot of things and think about a lot things, but right now there’s very little certainty.

BTN: You bring up the delta variant. Danielle, have you seen any effect at this point?

Amoroso: Last week was a difficult week for us. Several weeks ago, we said that after Labor Day weekend we wanted people back in the office two or three days a week. Since then, the environment has changed, and last week our leadership team pushed back that reopening date and now it’s to be determined. … In terms of travel, we are not seeing a pullback yet. A lot of our field individuals have been traveling for months now. There’s even some great info showing that it’s safe to get on airplanes—vaccines are highly recommended, masks, social distancing. I’m hopeful that we will have our employees out there to get the job done.

BTN: Very few travel managers know what their organizations’ volume will be going into the fall or 2022. What is the tenor of supplier conversation at this point? 

Mandelbaum: Everyone knows it’s unknown right now. Suppliers are asking about what we think is going to happen. But everyone is taking it with a grain of salt. If anyone walked into a supplier and said, "This is what my volume is at the end of ’21 and going into ’22," I think they are making it up. I wouldn’t bank on it, and I certainly wouldn’t put it in my sales pipeline. 

BTN: Are you extending or rolling over agreements? It doesn’t seem like you to roll over agreements. 

Mandelbaum: Mostly we are rolling over. Those who negotiate with me know I’m a bottom-line player. And it’s hard to negotiate on an unknown on both sides. I don’t think it’s healthy for anyone, so [rolling it over] makes a lot of sense. In the meantime, there’s so much leisure demand out there. I’m told the planes are full. 

BTN: Danielle, Otsuka is a fascinating case for this question given your rebound of domestic U.S. travel. You may be in an enviable position in that you have some volume continuity.

Amoroso: For the upcoming year 2022, we are asking hotels to roll over rates for an additional year. We want to see a full year of traveling again under our belts. And want to see that our partnerships are beneficial to both sides. Moving forward, I am a big proponent of dynamic pricing … as long as [the discount] is above a certain percentage. The dynamic pricing has to take special rates like AAA or member rates into consideration, even if it’s just a little bit more competitive than those other special rates. Booking through our channels is about protecting our employees, so we need to see dynamic pricing as a way to stop competing with those rates. The hotels have to understand that [safety] strategy. If they are offering lower rates outside the program, it makes it more difficult to fight that fight. That’s what I’m thinking beyond 2022. 

BTN: As a midsize buyer, do you think you have leverage to make that ask?

Amoroso: That’s why I’m waiting until after this year. It’s a constantly evolving situation we are in right now. So we want to look at this upcoming year and have that data to walk into negotiations for 2023. 

BTN: What about a strategy for air?

Amoroso: I manage travel for Otsuka America, but we also have Europe and Otsuka Holdings in Japan. Previously, we never looked to a global footprint for airline spend. Everyone managed programs on their own. The pandemic has sort of opened our eyes to the idea of looking at airline spend globally, so that category could really change.

BTN: Has anything been reprioritized in policy at your companies, and will things be different for travelers when they come back?

Mandelbaum: The answer is yes. But I don’t know if I’m far enough along that it’s fully baked. … The amenities and things that we provide travelers might be little different, and the market has changed too. A lot of carriers have rolled out new products. The Wi-Fi models are a little different and things like that. We are waiting for some of that to settle down. I could have spent the last year changing every time something changed in the industry, but that wouldn’t have been a good use of time because I didn’t have any volume. We are waiting to see and then we’ll have to make some decisions pretty rapidly.

Amoroso: Duty of care comes to mind first and foremost. Our previous policy mentioned it, but it wasn’t at the forefront. We’ve really embodied that now. Because of the pandemic, it made it visibly important to everyone else, so it was easy to get buy in. That was a big one. That filtered into specific policy changes like how chauffeured car service is now pointed out as an option for when safety is a concern. And a basic one that many companies had but we just didn’t: we’ve limited the number of travelers on a single flight. 

BTN: What have you learned through the pandemic about managing your travel program? 

Amoroso: At first, we micromanaged everything about the return to travel. We were controlling from start to finish. All reservations had to be called in, you couldn’t use Concur. We looked at the virus cases in the destination. But what we realized is that you can’t maintain that level of micromanaging the program. You have to find other tools and put things in place to empower and inform employees so they can make the best decisions on their own. It’s hard not to want to control everything and keep your people safe, but at some point they have to make the right decisions for themselves.

BTN: What are you looking forward to in the return to travel?

Mandelbaum: Like most people I’m looking forward to the end of this, but I am also looking forward to a new model. I’m looking forward to a new world and a new working environment with more collaboration and more connection than we’ve ever had. And, ironically, that may be with people farther apart on a daily basis.