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June 2009

Travel is Not a Four Letter Word

June 2, 2009

By Glenn Hamer

At the Manufacturer of the Year Award Luncheon hosted by the Arizona Manufacturers Council  last Friday, the general manager of Universal Avionics, named Outstanding Small Manufacturer, made an interesting point during his acceptance speech:  We need to stop characterizing business travel as evil.

Early in his term, President Obama sent out a populist message that travel by business jets to resorts would be frowned upon.  Given the amount of taxpayer funds that were being spent to rescue private companies, the President recognized that the public would not tolerate lavish corporate activities.

However, that concern needs to be balanced against the incredible importance that business travel has on the economy both nationally and in Arizona.  From the manufacturers who build airplane parts to the hotel front desk attendants, industries and jobs are suffering.  According to a recent article in The Business Week, "U.S. hoteliers are suffering from the sharpest slide since...September 11" with occupancy rates under 56% and "revenue per available room" down 20%. While Arizona remains ahead of the national average with a 59.1% occupancy rate, this year-to-date number is almost a 10% drop from last year, according to the Arizona Office of Tourism's "Lodging Indicators."

In an interview with the Phoenix Business Journal, the President & CEO of the Arizona Hotel & Lodging Association, Debbie Johnson, said that the biggest hurdle facing metro Phoenix's hotel industry is "overcoming the vilification of meetings and the negative perception of travel."

In a thoughtful letter to the President, Scottsdale Mayor Jim Lane wrote that while criticism for lavish business travel is justified in the some cases, "legitimate business travel has been caught up in a sort of pitchfork mentality." Tragically, the industry that accounts for nearly $20 billion in Arizona spending has been significantly damaged.  Scottsdale alone has seen over 80 events and meetings cancelled, which accounts for $23.9 million in lost revenue for local businesses.

After 9-11, then-President Bush and then-Mayor Rudy Guiliani made it clear that Americans should continue to shop and travel.  I believe history will judge them kindly for what, at the time, seemed to be almost odd comments.  As people heeded their words and continued making purchases and traveling, the economy recovered far faster from the aftermath of that tragedy than most expected.

The bully pulpit is a powerful perch, and it would be useful for the President to encourage legitimate business travel in the U.S.  Recovery will be all the more difficult if an integral part of the economy continues to be stigmatized.

Glenn Hamer is president & CEO of the Arizona Chamber of Commerce & Industry.

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