Today’s advisor is Ted Perlstein, vice president of sales and marketing at AmTrav. His guidepost encourages those involved in travel to examine how elected officials can help or hinder the industry.
The average American votes for a variety of reasons, not the least of which, according to Pew Research, is they’d feel guilty not voting. Ask most people to go beyond sound bites and campaign slogans on why they voted for specific candidates and there’s a good chance you’ll get crickets. Rarely do average voters dig below the surface. Rarely do they take the time to better understand how their votes might impact the industry they work in and thus their livelihoods.
The policies elected representatives create can promote or inhibit growth. Businesses thrive in predictable environments. Predictability fosters trust and growth.
Below are just a few areas from our industry — the not-so-small world of corporate travel that generates $547 billion, or 3 percent of the gross domestic product of the United States — where governmental decision-making and influence play a role in determining predictability. The full list is as long and exhaustive as a snow delay at LaGuardia.
Facilitating International Travel, Part 1 (Travel Bans)
Uncertainty is bad for business and nothing says uncertainty quite like spontaneously disallowing (or making it harder to) travel between countries. Policy changes like the recent travel bans by presidential executive order create uncertainty. Even companies with employees not from countries directly impacted may be more wary to send their employees to/from the United States. No one wants to be responsible if their travelers end up stuck by immediate, future bans. Ever seen “The Terminal”? Me neither. But I’m guessing it’d be like that. The point is, the President of the United States (POTUS) has a lot of influence on how open the borders are — not just for immigration but for everyday business, as well.
Facilitating International Travel, Part 2 (Visa Waivers)
Speaking of making travel more difficult between countries, within the past few weeks the Department of Homeland Security and the State Department announced a review of the Visa Waiver Program. A reciprocal program, VWP provides easy access to the United States for travelers from 38 countries without the hassle and uncertainty of obtaining a visa. From a corporate travel point of view, major potential policy shifts like this have the power to create uncertainty. And uncertainty, as everyone knows, is typically bad for business. As with DOT and the State Department, POTUS appoints the head of DHS.
Facilitating International Travel, Part 3 (Open Skies)
For over 25 years the United States has been part of “Open Skies” agreements with dozens of foreign countries. At a basic level, these agreements allow foreign airlines to fly direct routes to the United States and vice versa without traditional restrictions on frequency or fares. The agreements themselves are good for maintaining a healthy, competitive environment and spurring innovation where it has been severely lacking in the past. Ever flown Etihad first class? Me neither. But I hear it’s lights out versus any other competing product on the market.
The government agencies responsible for negotiating and overseeing them are the Department of Transportation and the State Department. You can’t vote for anyone in these agencies but POTUS is the person who appoints the head of each, and you can vote for him (or her).
You Can Choose Any Color You’d Like, As Long As It’s Black
When companies compete against each other, they are incented to innovate. However, if the playing field isn’t level — if there’s limited competition in the marketplace — there’s no incentive to improve products and services and everyone loses in the long run. Enter mergers and acquisitions. These have an enormous impact on competition. In the corporate travel space we have airline mergers, hotel mergers, car rental company mergers … pick your poison. In most cases, limiting competition by artificially removing competitors results in artificially higher prices and less innovation. For the acquiring company, this is good in the short term (and bad for everyone else) but in the long run, everyone loses. Competition is healthy. Competition fosters innovation, benefitting consumers and the industry as a whole.
On the national level, the government’s sentiment towards potential M&A activity starts with POTUS. He (or she) appoints the heads of the Federal Trade Commission and the Justice Department. Those organizations are responsible for reviewing proposed mergers to prevent monopolies and monopolistic pricing. The intensity of each M&A review, however, is subjective. It is dependent on the attitudes of the current White House administration (and, arguably, how much traffic at Reagan National Airport in the U.S. government’s backyard will be controlled by one carrier … but I digress).
At the state level, many attorneys general are actively involved in the M&A review process. Each state’s AG is elected by you, the state resident. So it’d be a good idea to research each AG candidate’s attitudes towards M&A, business and competition before heading to the ballot box.
Life, Death, Taxes And Passenger Facility Charges
Here’s one that affects all of us, but it’s so subtle that we typically don’t pay attention to it. Each time we fly into a U.S. airport, we pay a Passenger Facility Charge up to $4.50 per ticket. It’s been capped at that level since 2001 despite numerous efforts to push it up to as high as $8 by airport lobbying groups. Airports use these fees to pay for infrastructure projects. The fee is dictated by the FAA budget, which is approved by Congress. So the next time you’re talking with someone running for Congress (or already elected to it), unless you work for the airport, it’s probably in your best interest to press them on keeping these fees as low as possible.
Life, Death, Taxes And … More Taxes
Anything that makes traveling easier for road warriors is key. Funds for infrastructure and public transportation projects? Look no further than the gas tax. Each state legislature sets the gas tax and determines how the funds are applied. Does your city rely on great public transportation infrastructure? If so, you best find out how much the people running for the statehouse and senate feel about it.
… And More Taxes
Do conferences and conventions make or break your business? If so, get involved in local and state politics. Your city council representatives, along with your state legislator representatives, are the ones who not only set hotel and car rental taxes (sometimes called tourist taxes), but decide how the money is distributed. Some cities allocate funds for promotions, beautification and safety. Others use it as a kitty to pay for sporting venues. Whatever the case, it’s easy for governments to get away with taxing people who don’t vote because they live elsewhere. In reality, you, the industry employee are affected more than you think. These extra taxes add up and are quite often cited by conventions as part of the reason one city is chosen over another. So if your job revolves around a specific locale, the next time you see someone running for local or state office, take some time to talk to them about their views. Their decisions can easily impact the future of you and your company.
Get Involved
In addition to paying more attention to who is running for office in your local, state and national elections, there are some easy things you can do to influence regulatory policies that impact the corporate travel industry. Look into joining industry trade groups like the Global Business Travel Association (and/or its local chapters), Association of Corporate Travel Executives, Airlines For America and American Hotel and Lodging Association. Each group has existing lobbying efforts you can help champion. However, check the fine print. Understand exactly what each group’s agenda is before you spend your own time marching in lockstep.
In summary, get involved in politics. Vote. Educate yourself. If you feel strongly about something, influence others. Be active in your trade organizations. Dig beneath the surface when considering the people running for public office. Ask the hard questions. Hold elected officials accountable for their promises. The power really is in all of our hands. It’s up to us how we choose to use it.
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I found Ted’s piece on the impact of politics on business travel a useful reminder that political factors that affect our businesses are not a “given.” We have, in fact, potential influence we can bring to bear. He concludes that we should get involved in politics to promote our special interests. To the extent that increased or facilitated business travel contributes to the common good, I support Ted’s suggestion.
There are, however, considerations that should narrow the scope of our activism. Security, I’m sure nearly everyone agrees, should be taken into account. Not all procedures make sense, and those that don’t should be replaced, but here traveler sensibilities and convenience are properly secondary.
And what about the environment, social costs and public health? Business travel pollutes. No way around it. You either think this matters or you don’t. Social costs of business travel include the disruption of family/personal life and replacement of jobs where you can make a living with “share” economy jobs where you can’t. Public health’s vulnerability to travel is exemplified by our flu season this year and the ebola panic of some years back.
My point is that even if our living depends upon business travel, as responsible citizens we have to accept that business travel has its downside. I don’t think Ted was promoting blind boosterism, but we as an industry would do well to not so frequently overstate our case.
Alan is right. Wearing blinders while being cheerleader for our sector ultimately does more harm than good (I’m paraphrasing). Tradeoffs are critical for long-term, sustainable growth. Costs such as security, the environment and social (costs) are just a few areas that deserve a thorough review for every policy issue we have a direct or an indirect influence on. Like all things in life, it’s a balancing act, but one in which being as close to the industry as we are, our motivation to produce viable, healthy growth puts us in a unique position to promote the best policies overall towards that end. Taking the time to get active, to get involved is the necessary first step.
Ted’s essay is an admirable and clear-eyed look at the importance of government officials and their policies to the health of the travel industry. But is the “vote for the pro-travel politician” really a practical call to action for most of us?
I doubt it. I suspect most voters use their vote to support the guy or gal whose position best matches the voter’s on (at most) a few much larger, much more general issues, such as social, economic or national security policies.
If that’s the case, then we should definitely take Ted’s related call to action, namely to support those associations that are working to shape the travel-related policies that do match our views. That path affords us more choice and more specialized focus, without having to take on the excess baggage that might come with the rest of a politician’s agenda.
Allow me to make one suggestion in response to Ted’s otherwise excellent article on the importance of engaging with government officials – in addition to the trade associations he mentions corporate travel professionals should join and actively participate with the American Society of Travel Agents (ASTA). We are the national trade association for travel agencies of all shapes and sizes – online, storefront, independents and TMCs – with nearly a fifth of our over 2,700 member companies reporting that corporate sales make up 70 percent or more of their annual sales volume.
In addition to the policy issues Ted raises, allow me to submit a few additional examples of issues that will impact your readers we’re engaged on right now – fighting onerous new consumer disclosures connected to air travel that will cost agencies and TMCs almost $30 million a year in talk time, training and compliance costs; fighting proposals to expand state sales taxes to travel agency fees and markups (2017 proposals would have cost agencies $62.6 million a year in new taxes); sponsoring federal legislation to modernize overtime rules by giving travel agencies access to the retail establishment exemption; and working with the Department of Homeland Security to merge the PreCheck and Global Entry trusted traveler programs.
To tweak a famous travel industry slogan, “what happens in DC doesn’t stay in DC.” Policy decisions are being made every day in DC and in the states that will have an immediate and tangible impact on your bottom line and the way you run your business. As an industry, we can either engage in politics and have a say in the decisions that impact us, or leave the field to a well-funded opposition and hope for the best. Ted is right – let’s engage and not put our heads in the sand.
Eben Peck, Executive Vice President, Advocacy, ASTA