The industry takes a hard look at ways to assess travel risk better and improve management policies as the search for answers to the disappearance of Malaysia Airlines flight 370 continues. Caroline Boey reports
While it is imperative for companies to incorporate as many elements of risk in the air, on the ground, at the hotel, the booking channel of record, data protection, privacy, etc, it is impossible for any risk management policy or duty of care to be 100 per cent foolproof.
The disappearance of MH370 from Kuala Lumpur to Beijing on March 8 provided a wake-up call for corporate travel managers and their companies to ask if they need to, and/or how they can beef up their risk management policies.
Twenty employees of Texas-based semiconductor company Freescale were on the ill-fated flight.
Kurt Knacksted, president of the Association of Corporate Travel Executives, pointed out that any risk management policy should be clear, applicable to the entire organisation and supported directly by C-level endorsement.
He said: “A well-managed travel programme should at the very least ensure maximum visibility into who is travelling, where they are travelling to and when, and the suppliers (used). Companies (should) have the best possible support structure and information network when things go wrong by sourcing, partnering with and leveraging a preferred TMC and supplier structure.
“Anything outside this network weakens a company’s ability to respond to a crisis and to support their employees – all the more reason why a strong relationship with partners is critical.”
Greg Treasure, managing director, HRG Asia-Pacific, said TMCs are at the heart of protecting employees and employers and this includes providing a 24-hour service, real-time security information, traveller tracking, and being able to respond instantly and appropriately to any emergency.
It takes both hands to clap
Human behaviour is unpredictable, said a Singapore-based corporate travel manager, who used to work for a security software MNC, and business travellers do not always stay within policy for various reasons. This manager said: “In my opinion, loyalty programmes are the most evil things. If the traveller gets the agreement and approval of his line manager, he has the ability to go out of policy.
“Travellers know they should make their bookings with the appointed TMC, stay in a preferred hotel and fly on a preferred carrier so that the company with the help of its travel suppliers can track and help him in the event of a crisis or an emergency. But we are not able to do this at times.”
He continued: “Companies may invest in systems to (direct) travel advisories, information on whether or not they require vaccinations, security procedures, etc, to travellers’ smartphones, but some travellers forget to update their mobile numbers or refuse to provide their contact, next-of-kin details, etc. The traveller must realise he has a role to play in the duty of care equation.”
Knackstedt personally uses the tools and support structure provided to him as a traveller to the fullest. “From the advice I receive from my TMC during the booking process, to the email and security updates provided by the risk management and security advisory provider, to the safety card in my seat pocket and the escape plan on the back of the hotel room door, I (read them all),” he said.
“When you are urged to watch a flight safety video, you should because you are always going to be in a different seat. Even with hotels I return to frequently, my room is invariably on a different floor, or wing, and you need to be 100 per cent clear how to get out of trouble each and every time you travel.”
Dean Fowles, a corporate travel manager who has facilitated the Global Business Travel Association Fundamentals of Business Travel Management certification programme for Asia, said: “I’ve seen some companies simply mandate the adoption. If you don’t comply, you can’t file for leave or take advantage of other benefits. This may seem harsh at first, but it ensures compliance.
“In the GBTA certification course, we talk about the fact that the policy needs to be timely and reviewed periodically as a best practice. This means that someone is tasked to review it every few months. People change jobs and move regularly, which means it’s critical that the plan is up-to-date when something happens.”
The former corporate travel manager of a security software MNC considers an 80 per cent compliance rate as good. “If it falls to between 50 and 60 per cent, a review is necessary,” he opined. “Compared to 10 years ago, crisis management capabilities in tracking travellers have improved and the gaps have closed. There is still room for improvement though.”
Safety in smaller numbers
The anonymous corporate travel manager said his 15,000-strong company had 6,000-7,000 employees on the road, but fewer than five would be on the same flight. “Take travel from Singapore to Hong Kong as an example. There are eight daily flights and two, perhaps three, employees would be on the same flight, unless it is a meeting, then it would go up to six or seven. If it’s an annual sales conference with 500 delegates going to a destination, we would have to seek exception from each business unit and increase the insurance coverage.”
Far reaching impact
Lisa Akeroyd, Carlson Wagonlit Travel (CWT) vice president, global sales and programme management, Asia-Pacific, said the potential cost to companies that do not have a corporate travel risk assessment and management policy in place, or do not enforce their policy strictly, are three-fold.
She said: “First and foremost, it can result in direct harm to their travellers in the event of a crisis or emergency. Secondly, when a company asks an employee to travel as part of their job, it has a moral and legal responsibility to ensure the safety of that traveller. In many countries, employers have a legal obligation to provide a reasonably safe working environment for their employees, including when they are travelling on company business.
“Finally, if employees do not feel safe and secure when they travel, this could represent a hidden cost for the organisation in terms of a loss of productivity due to stress.”
According to CWT, severe travel risks affecting just this region over the last decade have run the gamut from natural disasters involving volcanic ash and floods, to political situations such as protests in Bangkok, and terrorism such as the attacks in Mumbai.
As many companies expand in less-developed and higher-risk countries, their travellers may not be familiar with the cultural nuances and infrastructure limitations, let alone heightened security risks, tensions, local adverse weather hazards, or even natural disasters that can put them at risk.
Akeroyd added: “Given the increasingly interconnected world today, new security challenges for companies have expanded well beyond isolated corners of the world to centres of commerce – places where business travellers go on behalf of their companies. Citizens of specific nationalities can be targeted for crimes based on profit or political gain.”
A TMC can play a significant role in helping clients develop their travel risk assessment and management policies and strategies, as well as provide support during crises or emergencies.
Treasure said: “Risk management is increasingly becoming a key component of an organisation’s travel management programme in RFPs. Today, organisations are expected to provide a more thorough level of travel risk management than ever before to employees who have to travel.”
He said: “In an MNC, duty of care is not the responsibility of a single department. It should be a cross-functional approach led by the organisations’ top executives. If the CEO is seen to be briefed before travelling, no one will question the need.
“The only difference is that SMEs, by their very nature due to the size, may not have separate departments such as HR, legal, security, compliance, etc to engage in such a policy development plan so it is more likely to fall on the shoulders of a single person.
“Regardless of whether a business traveller is from an SME or a MNC, it is incumbent on the organisation to provide the optimum level of duty of care that is compliant with both their business needs – for example, not having all their board of directors travelling on the same flight – and local laws.
“It is a legal requirement now that companies owe a duty of care to their employees in many countries. If they do not, they can be found criminally and financially liable. In the most extreme cases, the company can face hefty fines and the executives jailed. They can also face personal lawsuits.”
Further costs include loss of the company’s reputation and potential security risk to the company in the event of stolen company property such as the business traveller’s laptop which lacks sufficient data protection.
A good TMC partner is critical but the corporate travel manager still needs to be on top of everything.
Fowles said: “Years ago, a TMC account manager told me candidly, ‘Don’t count on us for this sort of information (traveller tracking).’ However, at the end of the day, some of the teams performed very well, anticipating storms and verifying if travellers were affected by new alerts.
“Your company’s sales representative may or may not understand the importance or have the experience in dealing with unfortunate incidents. That’s why when we are engaging hotels we need to take the time to meet the head of security for the property.
Back to safety and security basics
Tony Ridley, CEO of Intelligent Travel, a company providing travel health, safety, security and risk management solutions to corporates and travel industry providers, said there is still a long way to go as far as the interpretation of duty of care or the practical application of travel health, safety, security and risk management are concerned.
“Many of us will continue to be confronted with the serious nature of what at times seem like minor administrative decisions,” he noted, adding that hotel fires and bus accidents are far more frequent and likely to occur than plane crashes. “Yet few consider the sensibilities of factoring them into their travel risk management strategies.”
According to Ridley, the top three items overlooked in corporate travel risk assessment and management policies are the policies themselves, the generic coverage and pre-travel requirements.
“The reason the policies are a problem is that they make the assumption that every journey and traveller is the same. They fail to adequately segment the policy to include those travelling for the first time, senior/junior managers, gender, groups or those with special circumstances. It is more about convenience and appearance that this has been allowed to happen. If they looked at travellers as individual assets first, just like the rest of the business, then policies would be inclusive of the variations and requirements.”
Having a risk assessment and management policy to protect travellers is fundamental in doing business and cost should not be an issue.
According to Ridley, having or implementing a corporate travel risk procedure can cost as little as AS$7 (US$6.45) or as much as A$50 per journey with a full suite of integrated travel booking, management, monitoring, support, assessment, news, and on-call assistance. An effective audit or templated corporate travel risk management policy that is customised to a particular business could range from A$2,500 to A$7,000.
“Very few businesses can justify not making such investments in the management of their traveller’s risks to either their financial controller, the concerned colleagues and family or the courts in the event of claims or litigation,” he noted.
Philippe Guibert, International SOS Regional Medical Director, Consulting Services, South & South East Asia, told TTGmice that while a comprehensive corporate travel risk assessment and management policy might need some investment, some companies might not see the necessity for such a policy and might have the perception that basic insurance coverage was sufficient for employees who travelled abroad.
Despite the increase in business travellers, only 32 per cent of the 628 organisations surveyed by the International SOS Foundation had conducted person/location risk assessments prior to expatriate assignments.
Life-saving app in your pocket
EarthCheck, an internationally recognised environmental management and certification programme with more than 1,300 members in over 80 countries, has launched the ERI Risk App, designed to help the hospitality industry rebound from crisis situations and climatic events such as tsunamis.
Extreme weather events, according to EarthCheck, are expected to escalate and research shows that 80 per cent of businesses without a continuity plan will not survive two years after a major crisis.
The ERI Risk App puts paper-based crisis management practices into a smartphone with timely prompters for handling disaster mitigation based on pre-loaded preparatory action plans. It reminds users to capture time-stamped imagery, provide status updates, track unfolding incidents, communicate with stakeholders and map out recovery.
EarthCheck’s vice president sales, Andre Russ, seeded the idea of applying the company’s research and benchmarked intelligence to a risk app after experiencing first-hand the chaos that followed the 2013 Cebu quake.
Forced to flee his hotel, Russ and his clients watched helplessly without access to the action plans and contact lists they had carefully crafted.
“We couldn’t go back into the hotel where our paper-based reports and references for handling risks were filed,” he said.
David Simmons, a New Zealand-based scholar on sustainable tourism and a contributor to groups engaged with the redesign of Christchurch following the 2010 earthquake, believes the app will assist tourism businesses to prepare prior, during, and straight after a crisis.
“Our experience in Christchurch reminds us that visitors can be overlooked in disaster planning. They may not know the escape routes, may not be connected with local media, and they may not speak the same language as local residents. For these visitors the tourism industry is often their first safety lifeline.”
