More than 6,500 business travel professionals were in Boston two weeks ago for the annual Global Business Travel Association convention, from buyers who manage travel for major corporations to travel technology firms to representatives from airlines, hotels, and car rental companies. Katie Johnston of the Globe staff spoke to Michael McCormick, executive director of the association, about the mistakes companies made during the recession and why so many business travelers are flying coach.
How has the economic downturn changed business travel?
Probably by the end of this year, we will hit what I would call the reset button, where we’ve basically grown business travel [spending] back to the levels prerecession. It’s taken three-plus years to do so. The thing that’s become very clear to us is that business travel is a leading indicator for business growth. The slumping jobs figures have not been a surprise because we’ve seen a slower growth in business travel than expected this year.
What do the numbers look like?
We’re expecting business travel to grow in the US [by] 2.2 percent this year. We’ll get to a little over $256 billion. But our original forecast was something more like 3.6 percent, so we’ve downgraded. And really what we think is driving that is primarily what’s happening in Europe.
What lessons have companies learned over the last few years?
When the economy hit rock bottom in 2008, companies overreacted and cut more than they should have. They further hurt the economy, and it hurt their businesses. And now what we’ve seen is there’s an understanding of the importance of putting people out on the road. It sounds very simple, but the day that you lose a customer because your competitor showed up in person and you did a conference call is the last day you don’t send your salespeople on the road.
Some people thought that videoconferencing would put a bigger dent in business travel. Why hasn’t it?
At its very core, we’re still social beings. You want to meet and look across the table at the person that ultimately you’re doing business with. How much can get lost when you’re on a video conference or a phone call?
In this global economy, where business travelers are navigating different cultures, it seems more important than ever to send people into the field.
Of the 1,400 buyers that we’ll have here in Boston, over 70 percent have multinational responsibilities. Through all of the recovery, the single biggest driver from a business travel perspective was international outbound travel. That was where the growth came from. Very different than any other stage in our history.
Another recent wrinkle is heightened security measures. How have requirements to remove shoes, limit liquids, and go through body scanners affected business travelers, besides making them cranky?
What frustrates the business traveler is the loss of some of the predictability about what happens at the airport. If you’re TSA, you have a job to do, which is you’re trying to reduce the risk of anything bad happening. Part of that process is unpredictability, because you can’t have all the same procedures all the time or you kind of defeat the purpose.
How are expedited security clearance measures like PreCheck changing things?
They’re going to hit a million passengers that have gone through PreCheck. They’re expanding to about 30 airports, or will, this year. It’s a great start.
But at this point it still only impacts a relatively small percentage of the travelers. Instead of impacting 5 percent of the travelers, we want to impact 50 percent. The analogy is kind of like what happened with E-ZPass. We want there to be not one E-ZPass lane, but five.
The image of business travelers is of men in suits sipping cocktails in first class, but I just saw a survey that found that more than 75 percent of business travelers fly coach. Is that happening more often these days?
The “Mad Men” era — those days are really long gone from a business travel perspective. It’s very much about business purpose.