Travel ... More and Less

Business travel today revolves around one simple idea: Cut back on it. But is that always wise? American Express's Pam Arway distinguishes between smart travel and spending that deserves to be eliminated.

There are plenty of creative ideas afoot -- from new kinds of airplanes to new designs for airports -- to improve the future of business travel. But the present of business travel revolves around one simple idea: Cut back on it.

Don't get the wrong idea. We're big on efficiency and productivity, but mindlessly slashing spending isn't an especially creative response to an economic downturn. Better to travel even more -- if it is for the right reasons -- and to eliminate bad spending altogether than to issue across-the-board restrictions and budget cuts.

American Express, the largest travel agency in the United States by a factor of three, spends tens of millions of dollars a year studying, tracking, and interpreting trends in business travel. Pam Arway, executive vice president and general manager for corporate travel for American Express Corporate Services, gets to see all of that research.

Arway believes that the world of travel is in for radical changes. "We see plenty of dynamic pricing models on the horizon," she says. "Companies will buy tickets and hotel rooms in bulk, use reverse-auction models, even pay for flights on a cents-per-mile basis."

Fast Company traveled to Arway's office in New York to hear how she distinguishes between smart travel and spending that deserves to be eliminated.

Travel More to ...

... spend time with customers or potential customers. "You learn all about this in the school of hard knocks. How do you know when to get on a plane? You know when you lose a sale because you didn't. It may sound like a flip answer, but it's true.

"Eventually, it becomes intuitive. If there's anything on the line, if the relationship seems strained, or if you need to explain something complicated, you need to go. If you're introducing yourself for the first time, then you need to go. I love it when my competitors don't travel in these situations."

... build business beyond national boundaries. "This may be the most important trend going forward. We've seen U.S. companies' international spending go from 12% of their budget four years ago to 16% in 2000.

"And it isn't just the salespeople who are crossing borders. Sellers are dragging their suppliers along with them, ordering vendors to get global if they hope to do business. Customers are working the same way. They are after the best products and prices, and they don't think much about where it comes from."

... grow a small- or medium-sized company. "The third major driver of travel going forward -- and we have been seeing this for some time now -- has to do with company size. Our biggest growth area at AmEx is small- and medium-sized companies.

"Big companies tend to have staff in regional headquarters, so they usually don't have to go very far to meet with customers. Smaller companies have to fly people in. And when they are competing against a larger company for business, they're only going to win if they appear to be more nimble and prove that they can provide better service. Small companies demonstrate that commitment by being there -- something that large companies occasionally forget."

... help virtual workers do real work. "We are going to see more travel in organizations where there are a lot of virtual workers. Because they don't gather at the watercooler very often, there is a greater need for them to come together in a more formal way. This often requires travel of some sort. Without face-to-face interaction, it's hard for distributed organizations to instill the company's culture and values."

Travel Less If ...

... you are training colleagues. "Training used to be a good excuse to gather large numbers of employees, but not anymore. At AmEx, we're doing more training than ever -- but we're spending less than we did a year or two ago. Most of the savings comes from decreased travel. We've invested a lot of money in video- and Web-conferencing tools and in software that allows people to do self-directed learning. We see this with our clients too, and we expect it to continue."

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