“It may be business as unusual in the wider world, but that shouldn’t affect travel managers, heads down, doing their job”
LaGuardia as “third world”) and air traffic control. “The GPS system in my car is more advanced than what the Federal Aviation Administration has,” says Andrew Menkes, president of Partnership Travel Consulting. Menkes believes that, as a businessman, Trump understands better infrastructure “boosts travel pro- ductivity, and the more productive you make business travel, the better it is for the economy”.
PROTECTIONIST POLICIES Long-haul air fares have barely moved for years, for one key reason – fierce global competition from Emirates, Etihad and Qatar Airways. Rivals in Europe and the US have intensely lobbied gov-
ernments to restrict the Gulf carriers, arguing they undercut fares thanks to state subsidies (something the trio deny vigorously). So far, regulators have ignored these
pleas, but that could change. “It will definitely be up for review,” says Menkes. “Hopefully, Trump will back away from protectionism on this issue.” For good measure, Menkes would like
the new administration to lift the decades- old block on foreign investors owning more than 25 per cent of a US carrier.
DON’T PANIC! Finally, for a splendidly contrarian view, look no further than TCG’s Bill Kerr. It may be business as unusual in the wider world,
but that shouldn’t affect travel managers who have their heads down doing their job, he believes. “What we’re hearing in discussions with clients is that they have a lot bigger issues on their plates,” says Kerr. “There are tactical concerns about
a Trump presidency, like currency fluctuations, but that is secondary. The large majority of their focus is on strategic and functional issues. Nothing is going to shift their two-, three- or five-year plans for their travel programmes.” Sensible advice from Kerr, or shuf-
fling deckchairs on the Titanic? As with everything else concerning America’s next president, it is very hard to decide.
In Trump we trust... John Stepek, editor of Moneyweek, writes for BBT about the economic implications of The Donald’s new dominion
2016 WAS A YEAR OF EXTRAORDINARY POLITICAL SURPRISES. But even the most jaded observers would have to agree that the biggest surprise – Donald Trump’s election as US president – was kept for last. Businesses in the UK that were already reeling from Brexit, now face having to factor in a US leader with some potentially very different ideas of how the world should work. As with Brexit, we can’t yet know exactly what Trump’s rise to power means for the global economy. Investment markets have so far adopted an optimistic view. They take Trump at his word when he talks of boosting growth by introducing big tax cuts, and raising government spending in the US. Meanwhile, they take his other, less business-friendly promises – threats to crack down on immigration and to withdraw from various free trade agreements – with a big pinch of salt.We’ll soon find out if they’re right to do so. But in terms of the travel industry, there are probably two key areas where a Trump presidency could have a significant impact: the currency markets, and protectionism. On the currency front, Trump’s election has accelerated a trend that was already in place – the strong US dollar trade. The euro and the Japanese yen have slumped against the US currency, although the pound – already hammered by Brexit – has held its own. While forecasting currency trends is something of a mug’s game, it’s hard to see many reasons for the dollar to weaken substantially in the year ahead. The US economy is stronger than most of its Western peers, and the US central bank – the Federal Reserve – is tentatively raising interest rates at a time where others are still struggling to prop up their economies. Clearly a strong dollar makes life cheaper for dollar earners, so we can expect more outbound travel from the US, boosting demand for flights and accommodation, particularly for hotspots such as London. However, a strong dollar will also make travel to the US more expensive.
BUYINGBUSINESSTRAVEL.COM
Global businesses have to deal with currency fluctuations all the time, of course – from that point of view, this year has just been a little more eventful than most. What’s perhaps more concerning is the risk that Trump promotes a more protectionist US trade policy. Certainly Trump made political capital from speaking out against globalisation during his campaign, threatening to dump or renegotiate trade deals with everyone from Mexico and Canada (the long-running Nafta trade agreement) to the Pacific rim (the apparently soon-to-be short-lived TPP deal). This is worrying because at its most fundamental level,
protectionism is the deliberate process of putting up barriers between countries. That means it gets harder to ship everything from goods to capital to people across borders. And when one nation – particularly the most powerful nation in the world – lashes out in this way, others tend to retaliate. So it’s particularly worrying that one of the most likely targets will be China, the other big engine of global growth.
For anyone in the travel business, that sort of trade war would be grim – not only would global growth, in general, likely slow down as a result (as it did in the 1930s), but travel specifically would be hard hit by a sharp drop in the number of people travelling. The opportunities – if there are any – may be for travel management companies and other service providers: those who do still travel may require more assistance to navigate newly- tightened visa rules and the like. The good news is that Trump seems to have backed away from his most extreme policy positions now that he has secured his place as US president- elect. Let’s hope that continues in the new year – and that 2017 doesn’t bring us too many more surprises (although keep an eye on the French elections – that’ll be a story for later in the year!). ■
moneyweek.com
BBT January/February 2017 129
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144