Geopolitics an Increasing Challenge

Geopolitical issues were the greatest concern among travel managers surveyed. Nearly 60 percent said fractured relations between countries, as well as social upheaval caused by government policies in relation to their own citizens were creating issues for travel management. Hotels and airlines already were citing trade issues between China and the U.S. as a key contributor to acute third- and fourth-quarter earnings contraction in 2019, pointing to a slowdown in business travel particularly in the manufacturing and automotive industries. Social unrest in Hong Kong seriously upended a very strong meetings and events industry there as well, affecting the local economy and supplier balance sheets.  

McIndoe Risk Advisory president Bruce McIndoe told BTN to look for more—and potentially drastic—changes in travel and meeting patterns as global trade alliances shift over the long term, largely along a U.S./China fault line.  

"China's rise will create a ‘Team China' and ‘Team Rest-of-the-World,' " he said. "This could create huge barriers for transport between these two spheres. You may have onerous entry requirements and a surveillance state." It's likely, he added, that such geopolitical alliances will go beyond travel restrictions all the way to business structures and then circle back again to limit travel patterns even more. "As that percolates, we will end up with parallel camps that could ultimately result in bifurcated companies—one side that serves Team Rest-of-the-World with shares and value that go to the West and one side that serves Team China where shares and value go to China." In that world, business travel begins to look much different. 

These issues aren't limited to the U.S. and China. Scarce resources, business value and government finances actively affect business travel policies and logistics right now. Take the rising prevalence of taxation enforcement on cross-border workers, particularly in Europe. While the regulations have been on the books for years, jurisdictions now look at business travel in addition to expatriate workers when calculating these obligations.

Deloitte, EY, Concur and other providers are automating advisories for businesses to monitor the number of days employees are working in foreign tax jurisdictions either to limit time allowed in the market and avoid paying such taxes or to comply with requirements lest they get fined. It happens in the U.S. as well, as states strapped for resources pass new laws both to enforce and facilitate tax obligations from international workers. 

Buyers also cited localized social issues like the yellow vest protestors in France as disrupting their business travel management, shutting down the Metro and causing airlines like Air France-KLM, British Airways, EasyJet and Ryanair to cut flights last December. Eurostar train service also was curtailed at that time. 

Travel safety and security firm Healix International issued business travel warnings leading up to election day in the U.S., cautioning travelers to avoid protest hot points, and to ‘plan contingency routes as preferred routes may be blocked.' As if on cue, roadside demonstrators clogged traffic and shut down major thoroughfares in New Jersey and Texas over the weekend leading up to the election for president.