8/7/2019 Ashes in our mouths-How a volcano shed light on the true state of affairs in corporate travel risk management

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Volcanos that erupt and disrupt the worlds travel plans dont happen every day buttravel disruptions and threats to travelers do. It often takes a dynamic or amplified event to display just how much planning and oversight goes into day-to-dayrisk management, in order to reveal just how ineffective the process may be overall.

Travel buyers have admitted that the volcano eruption in Iceland has taken a sub

stantial bite out of their 2010 travel budget, if a new survey is to be believed.

Polling its international members, the Association of Corporate Travel Executives (ACTE) found that some 71% of global travel buyers said the disruption in Europe has resulted in a substantial economic hit on their travel spend for the year.Of this 71%, 36% percent described the unanticipated expenses as severe. An additional 21% indicated the hit was slight, while 8% reported being unaffected.

It is important to note that the financial factors of this crisis have a specialsignificance in the light of the fragile global economic recovery for business in general and business travel in particular, said ACTE president Richard Crum. If

even just 1% of the industrys financial contribution to the global economy were affected, that would equate to roughly 4 billion euros.

Crum added that travel managers have been preparing for contagion, pandemic, conflict, war, and earthquakes for years. For many travelers, that level of preparedness was reflected in their corporate response to the eruptions in Iceland. Forty-seven percent of companies responding to the ACTE survey had a plan in placeto accommodate stranded travelers. Twenty-nine percent did not have a specific program for this crisis, but moved forward with implementing one cobbled from other crisis programs. Twenty-five percent believe this crisis is so extraordinaryand rare, that no preparation could have dealt with these developments and haveno immediate intentions to change their policies.

The unanticipated expense of the crisis has already taken a big bite out of existing travel budgets for 2010, but survey respondents believe the crisis would not force the company to travel less in 2010 (76%). Twenty-two percent were unsureas the crisis is ongoing and 2% said yes.Stories continue to emerge of how travelers and companies have been forced to sleep in airport terminals, pay thousands of dollars for taxi rides across countries or cancel major business activities, all the while suffering substantial productivity losses of some of their companys most valuable human resource group. Itis not acceptable that company travelers be subjected to the same limited response or emergency interventions as your everyday tourists, in the event of such wide spread disruptions. If you have been significantly affected, you have failedand your system just doesnt work.

Poor surveillance of developing events, superficial plans and even less effective decision making methodologies reduce workable response options; if any exist after such systemic failure. Failure to identify and plan for whole-of-journey risk management leads to situations where your traveler/s is stranded in transit without a valid visa forcing them to sleep en mass in terminals with limited solutions. Similar oversights lead to false hopes that the situation will correct itself and anytime soon everything will be okay. After all this, if you believe thatthe overall situation will return to normal and you and your travelers will beon their way immediately after the airspace ban has been lifted, again; youre infor a nasty shock.

Numerous managers and travelers now understand the various roles required to ach

ieve productive, efficient and safe travel management. Your insurance company ismore than capable, and perhaps willing, to process your claim for losses and expenditure incurred but you are still stuck at the airport without a workable sol

8/7/2019 Ashes in our mouths-How a volcano shed light on the true state of affairs in corporate travel risk management

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ution and suffering a major loss in productivity for those that are typically within the top 20% of your human capital earning (compensation and business contribution) demographic. Your cheque will arrive in the mail and tangible loss/expenditure compensated. It still doesnt get you from A to B or even via D. Your localoffice or contacts dont possess the network or experience to manage your requirements, especially when the rest of the world is scrambling for the same resources. Those without wild stories of adventure to relate after this event are not in

clusive of a well thought out plan and capacity to act. Those with a more boringstory to tell but maintained productivity and contained costs, all the while preserving the safety of their people, have in their team brokers, insurance, travel management companies and assistance. Which is the smarter business option?

Total failure resulting in numerous stranded people are the result of high walled departments without collaboration. Lack of unification and leadership/ownership in the practice of travel risk management has lead to wide spread helplessnessand stranding. If you have key executives traveling for leisure also affected that will prevent them returning to work as scheduled, you have yourself to blameand your appreciation has proven to be too shallow.

This is not over. Hotels are likely to default on bookings for pending travel asthey still havent been able to clear the backlog of stranded travelers. Ground transport will be stretched and prices will rise even further. Government departments will debate the options but essentially there is nothing you can do to influence their inconsistent influence. Airlines will be pressured into economic decisions long before safety data is consolidated or examined under normal parameters. The thousands of inbound and outbound travellers will take much longer thana few days to clear, not forgetting those adding to the mele than need/want to travel this week. Overtime payments, supplies of food and water to airports, cashreserves and transnational collaboration will all act upon the solutions and choices. It is one thing to read about this in the media but do you really have ahandle on what is happening and how it affects you? Failure to do so will compound past mistakes too.

There was adequate warning that this event would have far reaching implications.The impact could be calculated. There was opportunity to implement plans or develop an effective solution to support the objective and effective, rehearsed management teams would have had sufficient time to assess the impact and act accordingly. The final impact was not fate but determined by everything you have doneto date. You have been weighed, you have been measured; have you been found wanting?