Study looks at ways crises impact corporate travel

June 09, 2009

A new survey of corporate travel executives provides insights into ways natural and man-made crises impact corporate travel in the U.S. and abroad, as well as actions being taken by corporations to reduce risks to their executives.<separator></separator>The survey asked corporate travel executives to estimate the number of incidents their travelers had experienced over the past year, selecting from 12 types of occurrences that impeded the trips. Weather emergencies top the list and were about 200 times more likely to affect corporate travel than terrorism, which ranked near the bottom. <separator></separator>Corporate travel is a $270 billion industry worldwide, according to PhoCusWright market research, and faces severe impacts from the economic recession. This important segment of the travel industry has been affected by increasing concerns about corporate travel risks after Hurricane Katrina, the Mumbai terrorist attack, a USAir flight crashing into the Hudson River and the recent loss of an Air France jet in the Atlantic.<separator></separator>"Despite their potential impact on travelers and tourists, the images of crises and disasters are inconsistent with the images of comfortable travel, productive business environments and relaxed vacation resorts," says Tim Tyrrell, director of Arizona State University's Megapolitan Tourism Research Center. "The corporate travel market is probably the most advanced in planning for emergency events and managing risks. The results of this survey begin to quantify the nature of risks to travelers and will hopefully encourage the dialogue about safety and security for travelers and tourists."<separator></separator>Tyrrell led the team of researchers that included Professor Cassia Spohn of the ASU School of Criminology and Criminal Justice; Lori Pennington-Gray, director of the Tourism Crisis Management Institute at the University of Florida; and Peter Tarlow, renowned expert on tourism crisis management and CEO of Tourism and More, Inc. The team coordinated with the Association of Corporate Travel Executives, or ACTE.<separator></separator>"The survey only begins to unravel the role risk plays in corporate travel," Tyrrell says. "The results suggest there are small but significant risks to travelers, and corporations are actively managing those risks."<separator></separator>The online survey was conducted among ACTE corporate travel buyer members. Forty members responded to questions and 16 completed the entire survey. The respondents booked a total of 2.5 million trips year. The 16 firms who completed the survey reported company headquarters in Canada (31.3%), Europe (31.3%), United States (25%), Asia-Pacific (6.3%) and Middle East and Africa (6.3%).<separator></separator>In the survey, an incident was defined as "an occurrence that impedes the completion or fulfillment of the purpose of the trip, excluding travel delays and other normal travel inconveniences." The incidents reported were compared to the 163,000 trips reported by the respondents to calculate the chances that each type of incident would occur.<separator></separator>Risk Chances per million trips<separator></separator>Weather Emergencies (Storms, Extreme cold and heat)<separator></separator>or Natural Disasters (Flood, Earthquake) 13,109<separator></separator>Cultural Barriers or Inaccurate Expectations 3,010<separator></separator>Loss of Ability to Telecommunicate 2,648<separator></separator>Health Emergencies (Individual Traveler),<separator></separator>Food Safety or Disease/ Pandemic/ Epidemic 1,038<separator></separator>Property Crime (Vehicle Theft, Burglary, Larceny-Theft) 977<separator></separator>Local Transportation Accidents (taxi, bus, walking) 326<separator></separator>Urban Riots/ Political Disorder 184<separator></separator>Physical (Personal Accidents) 178<separator></separator>Improper Identification or Documentation 160<separator></separator>Terrorism 61<separator></separator>Long-Distance Transportation Accidents (Airplane, Train) 12<separator></separator>Violent Crime (Murder, Rape, Robbery, Aggravated Assaults) 12<separator></separator>The survey also asked about each company's stage of adoption and implementation of nine travel safety and security practices. The results show that 88.2 percent of the travel companies practiced emergency medical assistance for travelers as part of their safety and security best practices, although only 35.7 percent of travel companies included a medical supply kit and 41.2 percent included a communication device for travelers as part of their safety and security best practices.<separator></separator>The results in the following table show the stage of adoption of practices among the responding companies.<separator></separator>Safety and Security Practices Has Has Does<separator></separator> Considered Adopted Practice<separator></separator>Emergency medical assistance for travelers 0.0% 11.8% 88.2%<separator></separator>External contractor for assessing risk 31.3% 12.5% 56.3%<separator></separator>External contractor for evacuation services 31.3% 12.5% 56.3%<separator></separator>Travel security policy and procedures 35.3% 11.8% 52.9%<separator></separator>Secure car service at high risk destinations 21.4% 28.6% 50.0%<separator></separator>Internal staff for assessing travel risks 20.0% 33.3% 46.7%<separator></separator>Security personnel at destinations 31.3% 25.0% 43.8%<separator></separator>Equipping travelers with communication devices<separator></separator>with appropriate coverage 17.6% 41.2% 41.2%<separator></separator>Medical Supply kit 42.9% 21.4% 35.7%<separator></separator>Although this pilot study is based on a small sample of corporate travel executives, Tyrrell says "it establishes some baseline information for risk management that has never before been available. It will also serve as a benchmark for an annual survey we plan to conduct with the Association of Corporate Travel Executives."<separator></separator>The ASU Megapolitan Tourism Research Center is devoted to studying the role of tourism in community development in order to strengthen its contribution to viable economic, social and environmental systems, especially in megapolitan regions around the world. The center is part of the School of Community Resources & Development, located in the College of Public Programs at the ASU Downtown Phoenix campus.<separator></separator>For a copy of the technical report, contact <a href="mailto:mtrc@asu.edu">mtrc@asu.edu</a>. For information about the Megapolitan Tourism Research Center, visit <a href="http://mtrc.asu.edu/">http://mtrc.asu.edu</a>.

School of Community Resources and Development