It will take months and maybe years for the full impact of a new U.S. president to be felt in the corporate travel industry. Right now all we have are campaign promises and threats, and lots of questions about the future.
Late last month, the Global Business Travel Association downgraded its outlook for this year again, in part due to uncertainty over the U.S. election. Spending is expected to drop slightly in 2016 and volume is forecast to increase only a percent.
Now that the results are in, uncertainty over the elections outcome is over. But corporations and travel management companies are left to wonder what to expect from President Donald Trump come January.
Skift contacted more than 10 companies or organizations associated with corporate travel to find out executives’ takes on the impact of the long election season and its outcome. We also wanted to know what they thought would be the most important action the President-elect could take when it comes to the corporate travel industry.
The topic was touchy. Several major travel management companies declined to answer questions. But those that did revealed fatigue with the lengthy, often ugly run-up to Tuesday’s vote and expressed hope for unity, economic strengthening and policies that would encourage the free flow of travel.
When it comes to the way companies have approached business travel in the past months, three words are often repeated: “wait and see.”
Michael McCormick, executive director and chief operating officer at GBTA, describes the stance as “an extremely cautious wait-and-see approach to investment in business travel bordering on paranoia.”
Between the election, the British vote to leave the European Union earlier in the year, and inconsistent growth in economies around the world, the year has been “challenging” for corporate travel, said Kurt Knackstedt, president of the Association of Corporate Travel Executives and CEO of automation technology provider Troovo.
“Lots of statistics are pointing towards relatively healthy growth in business travel from a broad perspective, however when we talk to corporate buyers and how the geo-political environment is shaping their company’s travel plans, most are taking a very cautious and ‘wait-and-see’ approach,” he said in an email.
Individual travel management companies are still seeing growth, including Christopherson Business Travel. CEO Mike Cameron said the Salt Lake City-based company has been growing at an 11 percent year-over-year rate.
“Most of the growth has come from new clients, so our market share gains have insulated us from the sluggishness in the corporate travel industry,” he said in an email.
Looking ahead, Cameron and others said they don’t know yet how Trump’s win will move the needle.
“Corporate travel tends to act like a leading economic indicator,” Cameron said. “It’s too early to know if the economy will grow faster under a Trump administration, but if it does, we could see our clients invest more in travel.”
As CEO of hotel shopping service TRIPBAM, Steve Reynolds said economic growth would lead to increases in hotel volumes from existing clients.
“If it starts to contract, we may see lower volumes from existing clients but increased volume from new customers looking for ways to reduce hotel costs without reducing trips,” he said in an email. “Business will always need to get done; clients will still need to be visited, prospects will still need to be sold.”
Regardless of the winner, McCormick said the issues facing the business travel industry were always going to be the same: investment in infrastructure and Congressional action on an FAA reauthorization bill.
“During the campaign, President-elect Trump pledged to spend $1 trillion in infrastructure investments over 10 years, so it is important that that investment is made and that the money is spent wisely,” he said.
In addition to infrastructure improvements, McCormick said the most important move the new president can make are ensuring the safe and expedient travel and freedom of movement of all travelers.
Cameron said Trump’s top priority needs to be uniting the country after “one of the most divisive and improbable presidential elections in recent history.” When it comes to corporate travel, he said strengthening the economy is key.
“If he follows through on his promises to reduce corporate taxes and business regulation, it could be good for the economy,” he said. “If he doesn’t, we could see continued sluggishness.”
Some in the industry said that they hope Trump abandons some of the controversial practices that he endorsed while running for president. Over the course of the campaign, he spoke in favor of banning Muslims from entering the country and, later, imposing an ideological screening test.
“The worst thing he could do for business travel is continuing on this whole anti-Muslim tirade,” said Paul Metselaar, Chairman and CEO of Ovation Travel Group. “Because all that’s going to do is stoke resentment and frustration and make the situation worse around the world that my corporate travelers face.”
Metselaar said he would like to see an even broader change in Trump’s behavior.
“I’m hoping that he’ll get some wise counsel and be able to control his impulses to attack and to divide this country,” he said. “And if he does that, hopefully it’ll be business as usual.”
Given the campaign rhetoric about building a wall between the United States and Mexico, as well as Trump’s emphasis on deporting undocumented immigrants and placing new limits on legal immigration, some wonder what message is going out about the country’s willingness to engage with the world.
“In general, protectionism is not really a good thing for business travel. Our industry requires freedom of movement, ease of access to markets, people and capital, and an ability to operate as seamlessly as possible across borders,” Knackstedt said. “Of course, safety and security of citizens and travellers remains paramount, but that always needs to be balanced with an ability to still get places and get things done. If the world becomes too closed up and walled off, that does not bode well for continued growth and robustness of the business travel environment.”
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Photo credit: Travelers walk through Reagan National Airport. In the world of corporate travel, executives are taking a wait-and-see attitude about the aftermath of the U.S. presidential election. Thomas Hawk / Flickr