29 October 2008

Is the end of business travel as we once knew it?

A report by the Economist asks if you are thinking of heading abroad for business, then beware as this is a wretched time to be holding a business-related discussion anywhere other than the confines of your office.

Just ask AIG, the beleaguered insurer under fire for Ã¢â¬Åâœunwarranted and outrageousÃ¢â¬~ junkets, including a sales trip to a Californian beachside resort and an alleged Ã&#pound;50,000 jaunt to a manor house in Dorset, Britain.

Or asl Barclays Wealth, which has seen its annual meeting at Lake Como dished up in the newspapers with the type of venom usually reserved for celebrity kiss-and-tells.

Economic chaos, it seems, is changing public sentiment towards private spending.

Business was once the preserve of the free-market few, but as the recession bites, moneyÃ¢â¬'where it is, where it goes, and what is being done by those in charge of itÃ¢â¬'has become everyoneÃ¢â¬â¢s business.

As a result, chief financial officers are finding themselves subject to the same scrutiny as treasury ministers and corporate travel, with its associations of plush hotels, first-class flights and exotic destinations, can strike an inappropriate note.

Ã¢â¬ÅâœMost corporate companies are only too aware of the perception of flying delegates or staff overseas at the moment,Ã¢â¬~ says the head of corporate events at one British firm.

Ã¢â¬ÅâœShare prices are simply too volatile." "The smallest public impressions of a company can generate meteoric effects in the stockmarket." "ItÃ¢â¬â¢s simply not worth the risk.Ã¢â¬~

Aware of the need both to save money and to be seen to be saving money, companies are cracking down on all forms of travel. Over a quarter of nearly 200 companies polled recently by the Business Travel Coalition have begun emergency cutbacks on their travel budgets.

Business travellers can expect some imminent changes.

Firstly, a major clampdown on Ã¢â¬Åâœnon-essential travelÃ¢â¬~Ã¢â¬'the type of journeys that bring staff together but donÃ¢â¬â¢t directly earn companies new deals, customers or money.

Even in vital cases (such as, for example, travel by internal auditing teams) the actual volume of travel could dwindle as the relevant teams shrink.

Similarly, internal meetings or company incentives that once jetted staff to foreign places could be reigned in or scrapped altogether.

Expect new ways of motivating staff that incur fewer costs and involve fewer exotic ingredients.

Video conferencing has been hailed as a timesaving, ecological alternative to the clocking up of thousands of air miles and now itÃ¢â¬â¢s increasingly being seen as a cost-cutting measure as well, with its price having dropped with technological improvements, so expect video conferencing to compete more aggressively with business travel.

Some argue that emotional intelligence gets lost over the airwaves, but technology companies will be working to rectify that.

Those who do go abroad should prepare for a return to sobriety. Ã¢â¬ÅâœRather than exotic destinations, we expect to see corporations return to old European capitals such as Paris, Berlin or Vienna for conferences,Ã¢â¬~ says Paul Smith, the managing director of Octopus Events, whose clients include Coca-Cola, Deutsche Bank and AOL.

Ã¢â¬ÅâœThese are the types of Ã¢â¬ËœseriousÃ¢â¬â¢ destinations that exude business cues and donÃ¢â¬â¢t tend to raise eyebrows in the boardroom.Ã¢â¬~

On returning to the office, expect tighter scrutiny of your expenses. Lavish blowouts passed through as Ã¢â¬Åâœclient entertainmentÃ¢â¬~, hefty mini-bar bills and cable-TV subscriptions marked Ã¢â¬Ëœcommunication servicesÃ¢â¬â¢ on a hotel bill probably wonÃ¢â¬â¢t be tolerated.

Ultimately, unless your business trip is bringing money into your companyÃ¢â¬â¢s bottom line with minimum fuss, donÃ¢â¬â¢t be surprised if it doesnÃ¢â¬â¢t happen at all.

A Report by The Mole