Invoking force majeure for events and looking ahead: Travel Manager Spotlight

April 17, 2020 Amanda Greenwood

Q&A with Duane Goucher, Director, Travel, Entertainment & Expense at an insurance provider.

Travel and Transport: What has your routine and travel program looked like since the coronavirus started to spread?

Duane Goucher: “As the number of coronavirus cases started to accelerate at the beginning of March, our company formed two response teams to monitor the progress of business activity and external factors. The red team consists of management making the yes and no decisions, while the orange team is made of the business units assessing what is going on day to day.

“On March 12th we made the decision to restrict all travel worldwide until April 30th.

“There is some essential travel still carrying on – such as litigation, so a handful are permitted to travel. We are using a daily pre-trip report that we also send to HR and legal each morning that details who is on a trip or who is about to travel.

“When we heard about staff changes at Travel and Transport, we made a financial commitment to ensure the continuity and stability of the travel team supporting us. That team knows how to run a catastrophe event and it was too risky to let that support go. By providing the team a level of comfort we can hold them together while the economics are not great on the TMC side.

There are daily de-briefs from the orange team and daily briefings with the Travel and Transport Meetings & Events team about what’s happening and action points there as well.”

 

T&T: Have those travelers faced any difficulties?

DG: “There's been a pull down from the supplier side – less inventory. Where a route may have had 12 flights a day there is now only three, and that means less flexibility on when our employees can travel. We are trying to stay true to partners, but the landscape is changing so much and so quickly.

“We have to be there to take care of clients. If we can’t fly, we might be able to drive but then will the car rental units be open?”

 

T&T: Meetings and events have been a big focus; how have you been managing cancelations?

DG: “We’ve cancelled all meetings and events in April so that has had a big impact. We've been working with our hotel partners to assess options. We use Travel and Transport Meetings & Events to manage sourcing so they’re now unwinding/unbundling the meetings.

“We have invoked force majeure in some cases, as the hotels and venues have fewer staff and the event would not be the same with fewer resources. There has been government guidance on this and it has been easier to put into effect. Hotels are not always accepting this clause though, and want to give us credit instead, as the hoteliers are struggling. But that credit might not be relevant if we don’t have plans to hold that event in the future.

“Force majeure can only be invoked based on the conditions of the day you cancel, you can’t claw backwards. So we are running as close as we can before we cancel. Travel and Transport Events gave us some great advice and have suggested that in the future we could set up an account where the money is only paid once the activity/event has happened. How ever we move forward, we want to do the right thing for the company and the partner.”

 

T&T: What else is on your mind?

DG: “If there is an event or crisis that could come up in the spring such as a hurricane. If the airline capacity isn’t there, how do we mobilize our employees if people need help?

“I worked in the airline industry through 9/11 and with an event like that you get to a point where you can start to plan the rebuild. This situation is a moving target like an earthquake; you don’t know how bad it’ll get or if this is only the start. There is conflicting information and a lot of uncertainty for everyone which means a lack of clarity, and it spooks people.”

 

T&T: Can you share any early key learnings?

DG: “I have started a list of learnings, here are the ones that spring to mind.

1. The need to consolidate to one program. Some subsidiaries have exceptions to the policy that are coming to light more in this situation. This is proving to C-suite that if they are not in the program, they are at higher risk.

2. Travelers are learning the importance of booking with our travel partner. When they have booked direct and have to wait in call queues, it helps us to have more productive conversations.

3. When we pulled reports of where our travelers were located, it became clear that many were using tools to book or store personal travel itineraries. As those trips were included in our business travel reports, it confused our efforts as we then had to identify the personal travel bookings versus business travel.  

4. We confirmed with our legal team that we could rewrite our force majeure clause as it was ambiguous and had never been legally tested.”

 

T&T: What does the near future hold?

DG: “The next phase is less clear as to what we do next; it's so fluid we don’t know what beyond August looks like for our events.

“Instead we are trying to identify milestones. For example, what is the latest date we need to make decisions on our next meetings so we don’t lose money. Conditions in the marketplace are changing so there's a constant reassessment.

“If nothing else, this has forced us to look at new ways to bring people together. Do we host hybrid events with a crowd still there in person, but a virtual element as well? It is the time to have a look at tools and a new way of doing things. It's forcing us to make decisions faster.” 

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