PurchasingB2B

Travel and its Risks – Lessons Learned from the Ash Cloud


December 15, 2010
by Jacob Stoller

PURCHASINGB2B MAGAZINE, NOVEMBER/DECEMBER 2010: When Iceland’s Mount Eyjafjallajökull sent a cloud of ash across Europe and shut down the airspace, travel policies for thousands of organizations were put to the test.

Amidst cancelled meetings, mounting hotel bills and an endless scramble to make alternate arrangements, policy makers were reminded that while it is impossible to anticipate highly improbable events, good travel policies can mitigate their effect on the bottom line and, more importantly, on the personal welfare of employees.

Travel risks are not only unpredictable but also highly diverse in their origin. Natural phenomena such as hurricanes, earthquakes, and volcanic eruptions are only one category—additional threats include terrorism, opportunistic crime, political upheaval, infectious diseases, vehicle accidents, fires, and just plain getting lost.

The ash cloud was far from a worst-case scenario–although uncertainty about getting home creates considerable anxiety for travellers and their families, most employees were safe and sound in hotel rooms, typically communicating through email and conference calls, and consequently staying reasonably productive.

The significance of Mount Eyjafjallajökull was therefore not in its severity, but in the sheer number of travellers affected and the logistical nightmare that ensued. At Shell Oil, for example, 4,000 travellers were stranded in various parts of Europe and around the world. “It was a big undertaking for Shell,” says Karen Willsteed, corporate travel-contract performance manager, Americas for Shell Canada Limited.

Shell was better prepared than most companies. They have, for example, procedures to evacuate employees from offshore oilrigs when storms occur in the Gulf of Mexico. However, it’s virtually impossible to prepare for every possibility. “It’s sort of the same but different,” says Willsteed. “What might work for a pandemic or flood may not work for when there are no flights, period. So I think it’s fair to say we had the mindset ready–we knew we needed to help people–but we didn’t necessarily have all the processes in place.”

For many, the event was a wake-up call. According to a study co-sponsored by International SOS and the Association of Corporate Travel Executives (ACTE), 37 percent reported that the fallout from the event “severely” impacted their travel programs, while another 35 percent reported “moderately”. The financial impact of the event was less dramatic, but nonetheless widespread—although only seven percent reported significant financial impact, only 14 percent of all companies reported none.

Alternatives to travel
While there’s no question that live, in-person meetings are best, the growing use of virtual meeting technologies such as web conferencing is causing many to think twice about travelling. According to an American Express Business Travel survey published in January 2010, 74 percent of companies polled had substituted teleconferences for business trips.

For Shell, the ash cloud incident heightened employee awareness of this option. “Probably the biggest change is that people now have a better understanding of the value of looking at alternatives to travel,” says Willsteed. “We’ve had a lot of attention on Live Meeting, and actually not travelling and trying to conduct your meetings or your work over a teleconference or a video conference.”

Fundamental issues
Personal issues often arise in the transportation, feeding, and housing of employees. “Travel is an emotional commodity,” says Willsteed. “Even if it’s only for business trips there are still lots of personal preferences built into it, regardless of your policies.”

Since travel amounts to setting up a temporary home for an employee, personal preferences and needs show up everywhere–exercise facilities, access to medical care and special menus just to name a few. As well, employees often combine business travel with personal vacations, complicating
arrangements.

Travel also entails a significant obligation commonly referred to as “duty of care”–the maxim that when a company requires employees to travel away from home for business, the company is responsible for looking after them. This covenant becomes more important when employees travel frequently, for extended periods of time, or to areas where there are known risks.

Travel management companies (TMCs) play an important role in helping companies meet their duty of care obligations, manage the logistics around personal preferences, and at the same time, rationalize their travel procurement in order to get preferential rates and improved levels of service. This role has become more prominent in recent years as airlines and hotels have moved to online booking and cut back their support staff.

Keeping in touch
Communication–in particular, the ability to locate employees, learn of their situation and deliver instructions–is a universal prerequisite to fulfilling the duty of care obligation, and emerged as the central issue during the ash cloud crisis. Of course, when a volcano erupts, it is too late–organizations need to have simplified, pre-existing channels for staying in touch. Employees should always know who will contact them in case of an emergency, and have access to several alternate methods for making contact.

“What helped us was that we had a really strong communication strategy,” says Willsteed. “We used our website, of course, and we also for the first time used our newly implemented messaging system. We were able to send text messages to travellers on their Shell cell phones, and that worked really well.”

Text messaging is a simple and cost-effective tool, but there are potential issues with wireless coverage that have to be addressed. According to the International SOS and ACTE study, while most people who were stranded during the ash cloud crisis had little difficulty accessing their personal messaging services, some North American employees didn’t have access to European cellular networks due to the nature of their service plans. It’s important to ensure that corporate wireless plans are adequate, and when employees are using individual plans, that they be advised to upgrade them.

Handling anxiety
When it comes to personal contact, travel management companies can make a significant difference. TMC agents are trained not only to make travel arrangements, but also to provide some much-needed reassurance. “They really understood how it felt to be stranded, away from your family,” says Willsteed. “The agent staff worked hard for each individual, they looked at everybody as an individual, and did their best to get them help.”

Even the TMCs weren’t free from overloaded phone lines, however. “Because of the load they had on their phones, it was really hard for them to get to everybody,” Willsteed says.

That said, the experience of those who dealt directly with the airlines was decidedly worse, as one Shell employee discovered. “His trip was a combination of business and personal,” says Willsteed.

“Of course, he had booked the personal side on his own through an external airline website. He was able to get the business portion of his trip back in order through the TMC, but trying to work on his personal portion of the trip directly with the airline was a challenge. He spent hours on the phone, literally.”

TMCs also help companies prepare their employees for difficult situations. “First and foremost, we try to work very hard with our clients on actual safety, not just knowing where their travellers are,” says Brian Hace, vice-president, client services at corporate travel provider Carlson Wagonlit Travel (CWT).

Preparing for high-risk situations
In many parts of the world, the duty of care obligation calls for special resources. International SOS, the co-sponsor of the above-mentioned study, addresses what could be called worst-case scenarios–situations where normally available services aren’t adequate to protect the employee against physical threats and ensure a safe journey home.

While insurance companies provide monetary support in emergencies, International SOS goes a step further by providing hands-on assistance which can range from sourcing medication for an individual who is stranded in a situation like the ash cloud incident to evacuating people during a political uprising. The company maintains an active presence in 70 countries, employing teams of doctors, pilots, and other specialists, and a network of facilities that include clinics, air ambulances, and other facilities.

The company also provides information services such as regional profiles and alerts. “These people need to take precautions before they travel, so that level of preparedness is key,” says Suzanne Garber, chief operating officer, Americas region for International SOS. “We break countries down by political risk, medical risk, and security risk. It depends where somebody is travelling. If somebody, for example, is travelling to somewhere in Latin America, they may not have a very high security risk factor, for instance, but the medical facilities might not be adequate.”

Getting employees on side
The more severe a threat is, the more important it is to have compliance with travel policies. “The key is knowing where your travellers are when something happens,” says Monica Hailstone, regional director for Canada at ACTE. “If you have the renegade travellers who haven’t booked through the travel management company, then you just don’t know. They could just be out there somewhere, and you haven’t got a clue.”

Willsteed concurs. “Really get the message out to all your travellers to use your TMC,” says Willsteed. “Because we have a pretty strong policy around that at Shell, and good compliance, we were able to track employees’ whereabouts, and even reach out to them to see if they needed help.”

Smaller companies without the budget or travel volume to engage a TMC need to put some standard procedures in place to ensure there’s no confusion when emergency strikes. Employees need to know this is for their own safety.

“At Shell, some people are asked to file what we call a Journey Management Plan, so we know when you’re due to arrive, and where you are at all times,” says Willsteed. “If you’re not using a TMC, then at least have something like that in place. Make sure they have your hotel numbers, your flight departure and arrival times.”

Because of the personal nature of travel, deployment of travel policies can entail a delicate balance of ensuring safety on one hand, and not being seen as invading employees’ privacy on the other. Policies should therefore be reasonable, simple, and well communicated.

Furthermore, those maintaining them shouldn’t be seen as a police force. Well-planned travel policies benefit both company and employees, and this should be consistently reinforced. On the other hand, it should be clear that travel policies are not optional, and management has to remain committed to them.

When there’s no TMC in the picture, employees will need to do some homework on their destination before embarking on a trip. A few minutes of research on the web are all that is required. What overnight accommodations are available in the case of the unexpected? What alternatives to flying would they have should the need arise?

Travelling with the right communications equipment is also essential, and an individual responsibility. If the employee neglected to bring a laptop power cord and the battery runs out, it may not be possible to check the company website for updates, or for an email with a new flight number. If the cell phone charger was forgotten, the employee could be stranded with no means of contact.

Then there are the basics; simply reminding travellers to pack some basic carry-on items such as an extra change of clothes is both simple and sensible. Particularly in the case of complicated flight plans, passengers can find themselves separated from their luggage for extended periods of time.

Getting the best deal
Good procurement practices can help employers meet their duty of care obligation and at the same time, reduce the costs of travel. “One of the first things I would recommend is a preferred carrier strategy,” says Hace. “If you can target your business to a limited number of vendors, that will give you significant leverage in reducing your costs. And, it helps your travellers, because if you’re preferred on an airline, more perqs come with that.”

The same goes for hotels. “We have a number of companies–I would say the majority—who book more than 40 percent of their rooms with a very narrow set of properties,” says Hace. “In doing that, they can negotiate a very strong set of perqs, whether it’s breakfast, or gym access, or whatever. All of these things are positives for the traveller, and all of it goes towards reducing the cost and improving the travel experience.”

When negotiating preferred arrangements based on volume, companies need ready access to the data that will support their case; this is a key area where TMCs can provide valuable assistance.

“Data management and data consolidation are huge,” says Tania Rasz, president of the National Business Travel Association (NBTA) Canada, “because the more data you have, and the more you know about your travel program, the easier it’s going to be to negotiate with your suppliers, whether that’s airlines, whether that’s car rentals or rail, whatever that might be.”

Another advantage to working with a TMC is their experience with policies and compliance. While a business may lack the oversight necessary to monitor proper employee adherence to a specific travel policy, a TMC can encourage compliance due to the fact that travellers are booking through them.

“There is an amount of your company culture that you can impart to TMC agents that will help us better serve your travellers,” says Hace. “We do work with travellers to help them understand what their business is trying to accomplish. We will try to reinforce the corporate goals.”

Keeping the basics in mind
It is never possible to completely prepare for a situation such as the ash cloud crisis–there are simply too many variables, and an event like a volcano eruption is so rare that drawing up specific guidelines would be excessive.

The key therefore doesn’t lie in covering minute details, but rather in having a plan that is simple, straightforward, and above all highly flexible.

Managers will find they can mitigate risk by providing standardized communications tools and procedures that ensure an employee can be located and assisted at all times, and by ensuring compliance with an effective travel policy that supports this aim.

With such measures in place, a company can reap the benefits of having a safe, efficient, and cost-effective travel department.