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Commonwealth Business Travel Group
Advocacy and Why It’s Important!
Shane DowneyDirector, Public PolicyGlobal Business Travel Association
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What we’ll talk about today…• GBTA BTI Projections• Travel Industry Issues• Advocacy and Politics• Campaign on USG Shutdown/Default
• GBTA Government Relations Priorities
• GBTA Successes/Concerns• How You Can Make a Difference
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GBTA Business Travel Index
GBTA Business Travel Index
3rd Quarter GBTA BTI™ Outlook – United States o U.S. Business Travel
Spending to Grow by 7.2% in 2014 – Nearly $290 Billion
o Total Trips taken to Grow by 1.6% to 459.2 Million
o Reverses 2013 Decline
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GBTA Global Business Travel Index• Global Spending Forecast to reach $1.12
trillion in 2013, a 5.4% Increase from 2012
• China – Moving to Global Dominance of Business Travel Market
o Expected to Surpass U.S. as the Largest Business Travel Market in the World by 2016
• Over Next 5 Years, India’s Spend will Grow at a Compound Rate of 13.5%
o One of the Fastest Growing Markets in the World
• Clear Signs of Rising Business Travel Spending Across Developed Markets
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Next Battleground for Distribution Spend
• IATA Resolution 787 (NDC)
o In 2012, the International Air Transport Association (IATA) Announced an Initiative to Fundamentally Change Airfare Distribution through Creation of an Electronic Standard and Distribution Model: New Distribution Capability
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Timeline of Airfare Distribution• 1940s – Airline Reservations Via File Cards and Papers
• 1950s/1960s – American Airlines Develops Reservisor (First Internal Computerized Reservations System) and SABRE - Semi Automatic Business Research Environment Automated Reservations System
• 1960s – Airlines Develop CRSS – Computer Reservations Systems For Airline Reservations, Then Other Commodities
• 1980s – Airlines Develop GDSS – Global Distribution Systems
• 1984 – Civil Aeronautics Board Begins Regulation of CRSS, Then Department Of Transportation Regulation of GDSS
• 1990s/Early2000s – Airlines Divesting GDSS
• 2003 – End of US Airline-owned GDSS (Worldspan Sale)
• 2004 – End of DOT Regulation Of GDSS
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Timeline of Airfare Distribution cont.• Oct. 2012 – Airlines Adopt Resolution 787/NDC at IATA Passenger Services
Conference; Affirmed Support for Resolution at General Meeting in June 2013
• March 2013 – IATA Files Application with DOT Asking for Approval of Resolution
• April 2013 – GBTA Files with DOT Asking DOT Not to Approve IATA Application
• Spring/Summer 2013 – Open Allies and Others Ask DOT Not to Approve IATA Application
• Summer 2013 – Per IATA Website, Over 70 Companies Have Signed up to Participate in NDC Pilots to Test Dimensions, Identify Risks, Validate Building Blocks, Educate Stakeholders, Etc. The Phase Will Last Through 2014
• In 2015 The Initiative Should Move Into a Deployment Phase, in which a Small Number of Airlines Will Have Adopted the Initial Version of NDC
o A Global Roll-out Is Expected to Take Place in 2016
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BEFORE THEUNITED STATES DEPARTMENT OF TRANSPORTATIONWASHINGTON, D.C. In the Matter of:
Agreement Adopted by the Passenger Services Conference Docket No. OST-2013-0048Of the International Air Transport Association As Resolution 787
COMMENTS OF THE GLOBAL BUSINESS TRAVEL ASSOCIATION (GBTA), INC.
• GBTA has insufficient information to assess the intent and scope of the Application; to assess the components and impact of the Resolution; or to assess whether the Resolution is not adverse to the public interest – specifically business travel buyers.
• GBTA does not believe that the Department of Transportation has sufficient information to make a full and fair assessment of the Resolution, and to determine whether the Resolution is “not adverse to the public interest” under 49 U.S.C. Sec. 41309.
• For these reasons, GBTA respectfully asks the DOT not to approve the Resolution.
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BEFORE THEUNITED STATES DEPARTMENT OF TRANSPORTATIONWASHINGTON, D.C. In the Matter of:
Agreement Adopted by the Passenger Services Conference Docket No. OST-2013-0048Of the International Air Transport Association As Resolution 787
Summary Arguments:
• Open Allies/GDSs and others (400 travel sellers and associations) argue: IATA is asking DOT to approve entirely new, anticompetitive distribution system that will result in less transparency, higher prices, and less competition/fewer options for buyers. It won’t really be voluntary as airlines will have to participate if they want to compete. IATA is not just asking DOT to approve a new XML-based data communications standard.
• IATA – Airlines argue: NDC is an IATA-led, industry supported project to develop an XML-based data transmission standard for communications between airlines and travel agents. The NDC standard is open to any third party, intermediary, IT provider or non-IATA member, to implement and use. IATA is not asking DOT to approve the NDC at this time, but, in practice, the NDC will be a wholly voluntary distribution system that airlines can use that will give buyers more information and more options.
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• 59% of U.S. Business Travelers Went Out-of-policy on at Least One Major Travel Expense During Their Most Recent Trip
• Nearly 90% Made A Choice That Went Against Specific Policies (I.E., Buying Business Class Instead of Economy, Staying Extra Night In Hotel, Etc.)
• One-third Used a Non-preferred Booking Channel; Two-thirds Used an Approved Booking Channel
The Impact of Out-of-Policy Decisions
Research Sponsored by:
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An Out-of-policy Traveler Costs Their Organization An Average Of $2,881 More Per Year Than An In-policy Traveler
55%
29%
12%
Incidence of Out-of-policy Decisions by U.S. Business Travelers within Travel Expense Cat-
egories
Increased Cost per Trip for an Out-of-policy
Traveler**
Increased Annual Travel Cost Per Out-
of-policy Traveler**
% of Spend Within
Expense Category**
$232 $2,877 20%
-$2 -$26 0%
$28 $314 4%
$233 $2,881 14%Total Across All Major Expense Categories:
**Data weighted to reflect similar proportions of domestic and international travel. Totals are weighted by the percent of business travelers who incurred each expense on their most recent trip.
An out-of-policy traveler is defined as a traveler who did not use the company’s preferred reservations tool, chose a higher class/more expensive option, chose a non-preferred provider, or opted for other options that were out-of-policy for their company.
The % impact on hotel, air/train, and rental car spend is based on the average annual travel spend when combining all travelers (both in and out-of-policy travelers).
Method of Booking is NOT Driving Out-of-Policy Cost…Choices Are
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All U.S. Travelers (358)
Out-of-policy Travelers (208)
In-policy Travelers (150)
H/L denotes a significant difference from the corresponding group. Q5a. Who made your travel reservations for this most recent trip?Q5b. Approximately, how much time did you spend making travel reservations for your most recent trip? Q4bTM. Approximately, how much time do you think the typical business traveler in your organization spent making travel reservations for their most recent trip?
1.21 Hours
U.S. Business Travelers
(of those who made reservations themselves)
U.S. Travel Managers
(estimated time spent by their travelers)
Average Time Spent Making Reservations
.58
Hours
1.53 H Hours
.82Hours
Out-of-policy Travelers Spend Nearly Twice As Much Time Making Their Travel Reservations
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GBTA Collective Voice of Business Travel Industry
• Policy, Tax, and Funding Decisions Drive the Success of the Industry and Your Companies
• Our Success Drives the Economy and Jobs• Support of Congress/Administration Matters to
You and Your Company • Bipartisan Efforts are Essential
Message to Government
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Business Travel: Vital to U.S. Economy
• Drives Economy and Jobs
• $270 Billion U.S. Spend
• $1 Trillion Worldwide Spend
• 30 Percent of all U.S. Travel Spend
• 40 Million Business Trips a Month
• 8 Million Travel and Tourism Jobs
• 1 in 10 U.S. Jobs Supported by the Travel and Tourism Industry
• $20 ROI for every $1 Spent in Managed Travel Program
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GBTA BTI™ and US Employment
95
100
105
110
115
120
125
137
139
141
143
145
147
US Employment
GBTA BTI™
GB
TA B
TI™
US
Civ
ilia
n E
mpl
oym
ent
(mill
ions
)
Sources: GBTA BTI ™ Outlook – United States, GBTA Foundation (January 2013) Bureau of Labor Statistics, United States, Current Population Survey (January 2013)
20062005 2007 2008 2009 2010 2011 2012
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GBTA Government Relations Priorities
• SMARTER AND SAFER PASSENGER SCREENINGo PreCheck and Global Entry – Risk-Based – Safe, Fast, Efficiento Visa Improvements Increase Travel and Commerce
• FAIR TAXATION AND FEESo Local, State, and Federal Taxes Must Benefit Travelerso Discriminatory Travel Taxes Hurt the Industry and Economy
• INFRASTRUCTURE: EFFICIENT AND ACCESSIBLEo Air Traffic Control Modernization Reduces Flight/Delays/Cancellationso Intermodal Improvements are Essential
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Government Shutdown Impact
Budget battles could slow business travel spending, group warns
“Another self-destructive U.S. government shutdown will absolutely have negative consequences for business travel and the economy as it would only further damage our country’s reputation as a place to do business,” said Michael McCormick, executive director and chief operating officer of the GBTA. ”It is critical to this country’s future position as a leader in the global economy that our elected officials work to keep the U.S. open for business.”
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Government Shutdown Impact
Federal Aviation Administration
• Air Traffic Controllers Remain on the Job
• Safety Inspectors Furloughed
• NextGen –Planning and Implementation of NextGen Programs Have Ceased
Customs/Border Inspectors
• Border Agents and Inspectors Remain on the Job
• PreCheck Application Process Stopped
Passport and Visa Processing
• Over 20,000 Visa Applications and 200,000 Passport Applications Not Processed during 1995-1996 Shutdown
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Government Shutdown Impact GBTA Member Lightning Survey
Two-thirds Concerned Shutdown will Negatively Impact Business If Week or More• Third Week• 57% Cancelled Meeting or Business
Opportunities in U.S. 57% Increased Uncertainty about
Economy 50% Cancelled Bookings 48% Cancelled or Delayed USG
Contracts 32% Staff Reductions
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Government Shutdown Impact
GBTA Campaign
• Media
o Multiple Releases/Interviews
o USA Today Exclusive
o NextGen Event
• Congress/Administration
o Senate Commerce Committee Comments
o LAC Letter - GBTA Members to Congress
o Release to Key Congressional Staff
• GBTA Member Survey
o Media
o Congress
o Federal Employees and Contractors
11 Trips Canceled in 3 days
• Passports and Visas
o Long-term Delay May Impact Issuance
During 1995-96 Shutdown – 20,000 to 30,000 Visa Application Per Day Went Unprocessed as well as 200,000 U.S. Passport Applications
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The LATEST Successes – You Made a Difference
• TSA PreCheck Developmentso Early Notificationo International Travel o PreCheck Application Programo Program Expansion
• Security Fee Increaseo Not Included in DHS Budget
• Prohibited Items List/Knife Policyo Withdrawn
• Sequestero FAA Delays Averted
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TSA Pre✓™ Improvements For Business TravelersSuccess
• TSA Pre✓™ Available Domestically with an International Destinationo Austin - Dulles – London
• Eligibility Noted on Boarding Pass• Expanded to 100 Airports• PreCheck Application Processo Initial Pilots: Indianapolis and
Dulles
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Aviation Security Fee Increase Success for Now• Administration Proposal to
Double Fee• Higher Costs Mean Fewer
Business Trips• GBTA Opposed FY 2013/2014
Fee Increaseo ACTION ALERT: Over 400
Member Letters o Not Passed
GBTA: Work with Airlines, Pilots, and Others to Oppose Increase and Support PreCheck
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TSA Prohibited Items List - KNIFE POLICY Success
• March 5 – TSA Announces Passenger Can Carry Small Pocketknives Golf Clubs, Hockey Sticks and Plastic Wiffle Ball-style Bats
• March 15 - GBTA Asks For Delay In New Knife Policy
• April 23 – TSA Postpones Changes
• June 5 – TSA Withdraws Changes
GBTA: Continues to Lead ASAC Subcommittee; Work with TSA
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FAA Sequester – Crisis Averted Success
• FAA Announces Furlough of 15,000 Air Traffic Controllers
• April 22 – 26 7,200 Flight Delays• April 26 - Congress Passes “The
Reducing Flight Delays Act”o DOT Secretary to Transfer $253 million
From Airports to Operations Fundo Full Controller Staffing
• GBTA: Sought Immediate Solution for Business Travelerso FAAo Congresso Media
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2013 – Greatest Risks• Government Shutdown and/or
Default…Sequestration and Deficit Reduction Targets
o Funding Decrease for PreCheck, NextGen, Global Entry, and Visa Reforms
• International Travel
• Elimination of Tax Benefits/Deductions
• Rental Car Taxes
• Reduced Government Travel
• Global Fight on Airline Emmissions
TRAVEL
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JOLT Act Increase International Business Travel
Shorter Lines, Less Paperwork, More Visitors
• Expand the Visa Waiver Program
• Expand Global Entry Program
• Reduce Visa Wait Times
GBTA: Continue to Support Global Entry/Visa Expansion and Simplified Visa Process
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Corporate Travel and Entertainment Expenses… A Good Investment
• Face-to-face Meetings Grow Profits and Work Force
• T&E Expenses – Large Portion of Operating Costs
o Current Deduction 100%
• Deductibility of T&E Expenses is Essential
• Reduced Tax Benefits Increases Costs and Reduces Profitability
• GBTA: Working to Retain T&E Tax Deductions
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Fight Higher Car Rental Taxes... Price Gouging of Business Travelers
• 800% Increase Since 1990
• Taxes Used for Non-Travel Purposes
• Increases Travel Costs
GBTA: Support Bill, Testify at Hearing, Dozens of Hill Meetings, and Coalition Efforts
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Reducing Government Travel Spend …Shortsighted
• GSA Scandal Lingers
• EO 13859 – Reduce USG 2013 Travel Spend 20% Below FY 2010 Level
• Numerous Bills Introduced
• Rep. Fitzpatrick: Reduce USG Travel Spend 50 Percent Below FY 2013 Level by 2017
o Solution – More Video Conferencing
GBTA: Working with AHLA and Others Opposing Harsh Cuts
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European Union Emissions Trading…Not the Solution for Aviation Emissions
• EU Carbon Tax on Flights to and from European Airports
• Money Collected Not Dedicated to Emissions Reduction
• Additional Airline Costs Mean Higher Fares
• Congress Votes to Allow DOT to Prohibit U.S. Airlines Participation
GBTA: Follow ICAO; Support Administration Push for Global Approach
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Advocacy: Impacts You and Your Company
If We are Not at the Table, Others Will Set the Agenda
We May Not Like the Results
YOU CAN MAKE A DIFFERENCE
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2014 Legislative Symposium
June
Washington, DC
• 2013 Legislative Symposium Highlights
o Reception Hosted by U.S. Congressional Travel and Tourism Caucus
o Remarks by Seven Senators and House Members
o Over 100 Meetings with Members of Congress and Staff
o Education Sessions
o Make a Difference!
Make Your Plans For 2014!
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Government Relations…..ENGAGE!
GBTA Website
GBTA The Latest
What GBTA is Doing in Washington to Push Our Priorities and Shape Policies
http://www.gbta.org/usa/governmentrelations/Pages/TheLatest.aspx
GBTA The Blog
What GBTA is Doing in Washington to Push Our Priorities and Shape Policies
http://www.gbta.org/usa/governmentrelations/Pages/TheLatest.aspx
GBTA Legislative Action Center
On-line Advocacy is Effective! Send a Letter about Key Issues to Your Elected Officials in a Few Clicks
http://capwiz.com/nbta/home/
