What impacts could the change in US direction have on business travel, travellers, travel buyers and travel suppliers?
Of course, nobody can predict how far indicated policies will be pursued and what unforeseen things might occur, but I think we can look at the likely developments and contemplate their effects, without worrying about dramatic and extreme possibilities.
We can divide US political events into two types: those that have a direct impact and those that might affect the business travel sector via economic, geopolitical, regulatory or social consequences.
This article looks at business travel, but some of the indirect effects are broadly relevant to procurement.
There can be an assumption when venturing into a discussion of all things Trump that the conversation will be negative. This is a business discussion that will try to look at negatives and positives. The Trump White House will be a pro-business, low tax, deregulatory activist Administration.
Direct Effects
Customs
The USA has a thousand little borders located in airports. We can expect a rigorous approach to entry into the country. This could invite automated solutions from booking systems and apps; another race for the leading OBTs to provide a needed service.
Consolidation
With less regulation, markets tend to run towards concentration and oligopoly. Under the lighter touch of a more permissive DoJ and FTC, consolidation among airlines, TMCs, travel IT, accommodation and others may accelerate, eventually reducing competition within the travel supply chain. This is the eternal irony of pro-competition over deregulation of markets. It can have trailing negative effects for several years or even decades. In the short term, sudden major deregulation can change markets and economies overnight.
Airline Safety
Not to be alarmist but firm oversight is the main thing preventing competitive pressures from pushing low-cost carriers into marginal safety practice. There may be airlines, perhaps new ultra-LCCs, that don’t belong in your travel program. It’s also possible that existing airlines, including international US carriers, could be affected.
EV Usage
If Federal incentives and assistance to the industry are reduced, EV hire will continue to be a premium practice and the shift to EV usage could stall under cost pressures.
Travel Pattern Shifts
If the Administration is true to its vision of an isolationist America, withdrawing from its post-war role as the protector of the trade routes and the director of globalism, then there may be a shift by other countries towards Asia, Africa and Europe, especially if trade with the US weakens. More buyers and sellers of goods and services will reside elsewhere. You might find yourself travelling to Frankfurt, Delhi, Hanoi and Lagos more often, with more services required accordingly.
Indirect Effects
Economic Downturn: Tariffs
Without getting anywhere near a political comment, if pursued, the slated tariff policies would logically cause both inflation and stagnation. Trade collapse is a recipe for 1970s-style stagflation. I remember it well. If the essential US economy goes into reverse, the world will follow to some greater or lesser extent. The demand for business travel would fall accordingly, probably thinning players from most corners of the travel industry. For those that have the reserves, the market position, the talent and the good fortune to survive, it would be an opportunity to expand. Recessions drive consolidation.
Geopolitics
Obviously, who can say? Greenland, Panama, Putin and…? My crystal ball, which never did work very well, is now completely broken. Location and event-based travel risk-management might need to shift into a higher gear, especially in terms of the speed of information and response. Acceptable margins for error and delay will reduce. Reliance on human punctuality, skill, knowledge and attention will be inadequate. OBTs and other duty-of-care carrying travel systems will need to be very good at their job.
Social Effects: Unrest
This is similar to the previous point, except for a new type and level of unpredictability. If unrest and, even, violence were to occur, it could be sporadic, immediate and in places not previously known for danger. Travel managers and their travel policies would need to be more attentive and adaptable on a daily basis.
Social Effects: Farewell DEI?
The reduction in DEI requirements in the public sector could flow into the private sector, depending on how corporate America really relates to DEI. These and corporate social governance stipulations in tenders and other procurement artefacts would diminish and simplify accordingly.
Social Effects: Less Carbon Counting
Similarly, it’s very hard to say how much the shift in recent years to measuring and managing travel carbon was done of companies’ own volition, or done for appearance’s sake. If the latter, then a move away from climate change concerns in Washington would result in a fast reversal of travel carbon mitigation by US governments and then, perhaps, corporates. My guess is that this wouldn’t flow on to other countries.
America First
If the Administration aggressively pushes a policy of “Buy American”, it could put pressure on non-US companies that derive a lot of their revenue from sales in the US. A foreigner’s reliance on business with the US Federal Government would be the worst case. If a Buy-American imperative were to spread through the private sector, either by zeitgeist or by law, then many more international suppliers would be affected.
Best to Be Prepared
Again, without going near politics, I think it is fair to say that our cities, countries and planet are facing less stable and predictable times. The role of travel managers, and the travel suppliers in their service, may go up a notch.
How far and wide, where and when can we travel without unacceptable risk? How do we define, identify and measure the risk? What systems and services are best to manage it? Apart from the obvious moral need to care for our colleagues, what are the new legal metrics and issues? What about travel insurance policies? Does traveller veto power need to be more applied and automated?
Dramatic things by definition are less likely. My point here is simply that, even if it turns out that there were few bumps, byways and blind-turns on the road now before us, it was good travel management and good business to have been prepared at its beginning.
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About the Author
Tony O’Connor, MD, Butler Caroye is a leading independent travel procurement consultant specialising in tenders, audits, analysis, strategy and advice.
