In The Company Dime’s From The Field program, industry leaders contribute guideposts and other commentary for publication to the business travel audience. We task these advisors with offering opinion, analysis and education rather than marketing. You are encouraged to contribute to the dialogue by commenting below.
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.
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.