Companies Rethink Corporate Travel
The recent terrorist attacks in the United States have changed the way Americans think about security and travel. It’s also affecting some companies’ travel policies.
Riverstone Networks Inc. (Nasdaq: RSTN), a 500 person networking company in Santa Clara, Calif., has cut-out all non-essential travel as a result of the terrorist attacks, says Andrew Feldman, vice president of marketing.
"I think, unless the travel is really important, people are a little concerned and re-evaluating whether or not they need to get on a plane to get business done," he says. "Personally, I believe air travel in the United States is safe, but people have loved ones to think about and sometimes they don’t feel comfortable having them travel."
Instead of flying to meet every customer face-to-face, the company is setting up video conferences and Webinars as an alternative.
Riverstone’s travel this month is down about 15 to 20 percent as a result, he says. But he emphasizes that not all traveling has ceased since the attacks. Just this week, Romulus Pereira, CEO of Riverstone and other members of the team flew to Asia to meet with potential customers.
Riverstone isn’t alone in its cut-backs. Larger networking companies are also following suit. Cisco Systems Inc. (Nasdaq: CSCO) has restricted all non-essential business travel until the end of this month. The company, which lost a member of its marketing team aboard American Airlines Flight 77 when it crashed into the World Trade Center, canceled a press event that was supposed to be held in Boston yesterday. The event has been rescheduled for October 2, with media invited to join in via Web conference.
TrueSAN Networks Inc., a storage area networking company, has actually canceled CEO Tom Isakovich’s keynote address at the Byte and Switch http://www.byteandswitch.com sponsored StorageNet, citing a cutback in traveling due to the recent terrorist attacks. The conference, which was supposed to be held at the Jacob Javits Center in Manhattan in early October has been rescheduled for December 11th through 13th.
Other companies have consciously not made changes to their travel schedules in an attempt to show terrorists through their actions that the U.S. way of doing business will continue. Following the attacks, Sun Microsystems Inc. (Nasdaq: SUNW) had planned to move a press event that was to take place yesterday in New York City to San Francisco.
"With all the hardships and difficulties over the past two weeks it seemed so out of place to do a product demo," said Ed Zander, COO and president at Sun, who was born and raised in New York City. But after hearing Mayor Rudolph Guiliani urge the city and the country to fight back by returning to normal, the company decided to go ahead with the original plan, flying its top executives, including CEO Scott McNealy, cross-country to Manhattan for the event.
Sun actually had offices in the World Trade Center. None of the 340 employees in the office that morning were killed or reported missing, but the company did lose one employee, a passenger aboard one of the four planes that crashed on September 11.
Melissa Abernathy, a spokeswoman for American Express Corporate Services, says that her company has seen these exact same trends across a broad spectrum of industries. In an unofficial poll of about 20 of the firm’s largest customers, she says agents found that companies are reacting in one of three ways to the tragic events. Some, like Sun, are not making any changes to travel policy and are actually going out of their way to encourage travel. Others, like Riverstone and Cisco, are restricting non-essential travel or limiting travel for a set period of time. And still others like TrueSAN seem to be canceling most of their employee travel indefinitely.
"A lot of the travel that’s being cut is intra-company, where video conferencing or business tools can be used to accomplish the same goals with employees," says Abernathy. "The deal-closing trips are still being taken. That’s just the way Americans do business."
The best indicator for how much companies will cut back on traveling is to look at the U.S. airline industry, which earns the bulk of its revenue from business travelers, Abernathy points out. Most US carriers have already cut schedules by 20 percent to offset huge losses experienced during the week of September 11, but they are also figuring in additional losses expected in the near term.
Abernathy says that American Express has already seen calls into the corporate travel office picking up this week. She adds that companies had already started cutting back on travel prior to September 11, and that the terrorist attacks have only exacerbated the situation.
The events of September 11, 2001 are still on the minds of many business travelers.
"I fly all the time for work," said Frederic Thepot, director of business development for Dynarc, who was stranded in San Jose the week of the attacks. "I never used to be worried. It certainly makes you think now, but I still have to travel."
— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com and Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com