Global markets have been on a roller coaster in April, as governments
and economies reacted to the Trump Administration’s “now-you-see-them,
now-you-don’t” tariff strategy that went into full effect last Wednesday but
only for about 12 hours before the White House put a 90-day pause on the table.
Travel stocks surged on the news Wednesday, with hotels,
airlines and online travel agencies beating the 8 percent increase for Dow
Jones Average by a considerable amount. Another drop on Thursday was followed
by strong performance Friday as investors caught a tailwind with Trump’s
suggestion that he was “optimistic” about progress with China on a trade deal.
Business travel, however, is about business—not as much
about travel—and it can get caught in the crossfire of economic volatility as
one of the first business costs to trim.
When the Rubber Does Not Hit the Road
Travel managers may not be in the driver’s seat when it
comes to making go, no-go decisions about a particular business trip. However,
they should provide the business with guidance and mechanisms to throttle travel,
when necessary. About one-third of 18 CT100 companies BTN sat with last
week for a conversation about business travel outlook said their companies were asking for those mechanisms. These were the tactics on the table right now:
Focus travel dollars on revenue-generating travel. Sales and customer-facing travel brings in the revenue. In tough economies,
that’s the travel that keeps the lights on and payroll coming. One CT100
company was contacting employees with booked travel for future dates to have
them review with their managers whether the trip was business critical,
otherwise they were required to cancel.
Reducing conference travel. With return to office
efforts still not complete, industry conference travel has proved an
opportunity also to get internal teams together. That outlook dimmed with
companies saying they will send fewer attendees to conference and, until
corporate confidence returns, internal collaboration travel would also see a
pullback.
Meeting and event scrutiny. Companies may
also taking a similar tack with meetings, but it’s tricker. Once contracted meetings
business incurs cancellation and re-book penalties should they not take place as
planned. Among CT100 companies, currently contracted meetings and incentive
programs are largely moving ahead to avoid such penalties. Future meeting commitments,
however, look like they could slow down until the economy shows signs of
stabilizing.
Leveraging pre-trip approval. None of the companies
BTN talked to were rushing to put new pre-trip approval processes in place.
However, those who had existing mechanisms were leaning harder on them for the
short term.
Virtual meetings are an easier lever to pull. As
companies are now accustomed to diverting travel to virtual mediums, travel
leaders reported this as much easier to accomplish, with better systems than
prior to the Covid-19 pandemic and virtually every employee now accustomed to
such alternatives.
All that said, not all companies are moving to cut travel. A
recent BTN
flash survey showed about equal percentages of companies citing economic
volatility and uncertainty as impacting their travel activities versus those
who said there had been little to no impact. BTN’s CT100 roundtable reflected
the same—slightly less than half reported business-travel-as-usual travel for
the time being.