The questions facing today’s business travellers are more to do with why they travel and how, even whether to travel or not. Recent events have focused attention on each trip’s return on investment. It’s hard to quantify how many New Zealand business travellers have cancelled or delayed travel to Asia because of SARS, but it has been trend in recent months. Some commentators estimate that business travel to Asia is down 40 percent since SARS first hit the headlines.
It would be irresponsible to ignore SARS. It can, after all, kill. But does it justify the hysteria that surrounds it? sense of perspective seems important. Tuberculosis, for instance, is one of many serious diseases and the World Health Organisation (WHO) currently describes it as the “world’s most important resurgent disease”. Tuberculosis kills more than three million sufferers every year. SARS’ total victims at the time of writing were modest 770. If SARS had been called more prosaic name like “Asian Flu 2003”, would we have been spared the hype?
Issues surrounding security and the risk of catching SARS have changed the nature of travel and the flow-on effect has been airline shrinkage. United Airlines pulled out of New Zealand and Air New Zealand and Qantas took up the slack.
Many long-haul plane fares have dropped dramatically, some to their lowest level in 10 years. Airlines are wooing customers and in May we saw some astonishing deals on flights to Europe.
These opportunities are well advertised, but the business traveller cannot capitalise on these good deals if he/she needs to be more flexible, explains Andrew Bowman, general manager sales and marketing at Synergi Global Travel. “It is confused marketplace at the moment. The alliance between Air NZ and Qantas is causing uncertainty and the cheaper flights are being picked up by the leisure sector.”
Although New Zealand experienced four percent economic growth last year, the business travel industry relies on the British, US and Asian economies to be healthy as well. “This year has seen succession of difficulties around the globe so we have had to work extra hard to find new customers,” says Bowman. “A lot of airlines aren’t in great shape with capacity cut and United pulling out of New Zealand. True competition is no longer there and choice is limited. Today’s business traveller has to fly via Australia to travel first class to Los Angeles.”
Bowman sees compliance and authorisation policies as the other big issues facing business travellers. “More vigilance is required and business travellers need to pay attention to regulations about visas, importing cash, insurance wording, and so on. More clients are requesting our pre-trip reporting, which covers things like who is intending to fly, and how many from one company are on the same plane.”
SARS might have forced prices to Asian countries down, but has it pushed service up? Few travel experts think so. Most say service needs improving. Take the frequent first-class traveller across the Tasman on Qantas flight for example. He or she has no phone sockets and will pay the same price whether the plane is 747, 767, or 737 the latter having 1970s’ narrow lounge-style seats.
“Quality of service outside the US has gone down and this is an area that needs to be addressed. If I want to travel from Auckland to Singapore now I would have to go via Sydney so the flight is longer, on narrower seat and with no phones.
“Travel is more unpredictable now. Previously my expectations were met. I could park my car and it would take nine minutes to go through gold card express check-in. Now the type and age of plane is as unpredictable as the food they serve and level to which the seat will decline,” says David Allen, chief executive at BTI New Zealand.
Travel is not an option for some businessmen and many agree that deals are best sealed face-to-face. Our renowned Kiwi pragmatism has ensured that we work with the problems to continue business as usual. Flights to the US are reasonably full and the experts say it is often difficult to get seat now that LA has become the popular route to Europe.
“Over the last few months we’ve seen strong upswing in demand for our flights via LA to London. Business people are still travelling to the UK and Europe for meetings, but choosing to avoid Asia and travel through the West instead,” notes Air New Zealand’s Roger Poulton, vice president New Zealand and Pacific Islands.
“This situation has been helped by good availability on this route following the increase in services on Auckland to Los Angeles – up to double daily at the end of last year with further three flights added in April,” says Poulton.
Greg Hamilton, sales and marketing manager for Flight Centre’s corporate division for TQ3 and Corporate Traveller, says airlines flying east have severely cut capacity. “If you are seeking seats on preferred routes, you will have to work harder to meet your needs. My advice to business travellers is to check your insurance policy wording carefully and be prepared for extra hassle and security measures, especially in Asian airports.”
Hamilton predicts that forward bookings will keep capacity low through to September with more competitive pricing to come. Business travel is no longer seen as jolly jaunt and there is very little non-essential travel these days. “Managers should consider the opportunities on offer at the moment and ask themselves how else they can save money on travel?”
Trip tips before leaving home
Experienced traveller, BTI’s David Allen, recommends the following at the time of booking.
• Check the WHO website for up to date information on SARS www.who.int/en/.
• Leave copy of the first three pages of your passport with your company and/or relative.
• Ensure you have your travel management company’s 24/7 emergency contact number.
• Ensure you have comprehensive insurance cover and take the policy details with you.
• Passport – it should be valid for at least six months. Does the name in your passport match exactly with your airline tickets? Do you need visa?
• Make sure your travel management company has reviewed its disaster recovery plans to ensure critical information could be sent at touch of button.
Exporters
Exporters must go to markets to generate business and seem to have developed growing resilience to the global environment. Our ‘can do’ attitude has ensured that exporters remove the risk of travel as much as possible but keep the problems in perspective. This year has been testing time for many New Zealand exporters due to three main factors: the climbing New Zealand dollar and disadvantageous exchange rate; rising freight costs; as passenger loading on planes decreases, less planes leave Auckland.
Mike Desmond, export manager at Eastern and Global New Zealand, says that his cut flowers exporting business has not been as badly affected as many exporters, but the three factors have had an impact. “As cut flowers are light we pack them onto passenger planes at minimal cost instead of using freight planes. Over the past few months demand for flowers from markets like Hong Kong, Taiwan and Singapore has diminished by 50 percent. Street markets in these countries are places of fear and people are wearing masks. The upside for us is that these are not our key markets. Also, the flower export business drops to about quarter over the winter months compared to the summer season.”
Exporters’ business confidence is generally down. Desmond’s predictions for exporters for the next 12 months or so remain pessimistic. “The global travel industry has been through tough time and it is now coming home to Auckland. I can’t see it improving in the short term.”
Exporters of other perishable goods have experienced worse problems. Cathay Pacific now flies from Auckland just once instead of twice daily to Hong Kong, major hub to Europ
