The United States inaugurates Joe Biden as its 46th President on 20
January. Given the chasm in policies and personality between him and the
45th president, does that mean big changes lie ahead for business
travel?
Biden’s capacity to transform his country will remain unclear until
the result is known of run-off votes for two Senate seats in Georgia on 5
January. If the Democrats win both, they effectively gain control of
the Senate as well as the House of Representatives, clearing many
significant obstacles to the new president’s legislative agenda and
cabinet and judicial nominees.
If the Senate remains Republican, says Andy Menkes, Florida-based
founder and CEO of Partnership Travel Consulting, “it’s more difficult
to get things through. The importance of this race is near equal to the
one for the presidency.”
Pending that outcome, here’s what is likely to happen to business travel.
Covid-19: Tackling the medical crisis
For
business travel to recover “we’ve got to get the virus under control,”
Airlines for America (AfA) senior vice president for legislative and
regulatory policy Sharon Pinkerton told a recent webinar hosted by BTN Europe sister publication The Beat.
At the time of writing, with more than 100,000 US citizens hospitalised
by the virus and 280,000 dead, that is clearly not the case.
[UPDATED:
Since
this article was written earlier this month, the number of deaths in the United
States caused by coronavirus has risen to 320,000 as of 21 December, with
115,00 hospitalised on that date.]
Under Biden, the US will shift from a “leadership making fun of
people who wear masks”, says Menkes, to one which has made suppressing
the virus “a first-day priority”, according to Pinkerton.
Biden has confirmed he will make masks mandatory on all public transport and strongly encourage it where he cannot enforce it.
Other possibilities, all of which AfA is calling for, include the
launch of a track-and-trace system, a regulatory framework for risk
assessments, and nationally coordindated verification, certification and
communication of test results.
Biden has said he will not order a national lockdown but active
discouragement of travel at the very least is likely until key Covid
indicators turn more favourable. The President-elect has already urged
US citizens not to travel for the Christmas holidays, as he did for
Thanksgiving.
Covid-19: Tackling the economic crisis
[UPDATED:
On 21 December Congress approved a $900 billion pandemic relief package.
Support for businesses included $15 billion to help airlines with their payroll
and Paycheck Protection Program loans to small and midsize companies, which
American Hotel & Lodging Association president and CEO Chip Taylor said
would “provide a critical lifeline for hotels and other businesses that have
been decimated by the pandemic.” The bill also includes $1 billion for rail
operator Amtrak and $2 billion for airports and concessionaires.]
Much-needed relief for the country’s travel suppliers and service providers can't come soon enough.
“The hotel industry is devastated. We are teetering on the edge of
catastrophic failure if we do not get Congress to take action,” American
Hotel and Lodging Association executive vice president of government
affairs Brian Crawford told The Beat’s webinar. Forty per cent of US hotel employees are currently out of work.
During the same webinar, American Society of Travel Advisors (ASTA)
executive vice president for advocacy Eben Peck agreed that
“catastrophic is probably the best word”. Peck added that 95 per cent of
ASTA members have revenues down at least 85 per cent, while 64 per cent
have laid off at least half of their staff.
All the association representatives agreed that a relief package
before year-end is likely to be stymied by partisan squabbling,
exacerbated by the impending run-off in Georgia. However, Crawford
expects more help once Biden takes office.
“I am hoping that a new administration will realise that yes, federal
government does need to step in, that they need to provide additional
liquidity for businesses that are failing, and that they are the only
ones that can do it because private banks are no longer [lending],” he
said.
ASTA also hopes for more proactive facilitation of travel resumption
once safe to do so. “I would love to see the Biden administration be a
little more active in creating, for example, an air bridge between New
York and London,” said Peck. “We’ve got to get pilots set up so that we
can restart international travel between now and when the vaccine is
widely available.”
Sustainable travel
Unlike
his predecessor, Biden acknowledges the climate emergency and has
declared his intention to tackle it, starting by rejoining the Paris
Agreement on climate on day one of his presidency.
The extent to which he will use carrot and stick to encourage
environmentally friendly transport and/or deter bigger polluters
respectively is unclear, and is perhaps an issue especially contingent
upon whether the Senate turns blue.
The Paris Agreement targets 50 per cent emission reductions by 2050,
leading to speculation that airlines may be required to purchase carbon
offsets for flights.
More generally, Menkes thinks US companies will come under pressure
to reduce their carbon footprints, although that will prove very
challenging when greener transport alternatives are scarce. However,
Biden is a noted train user and is expected to improve funding for
Amtrak, the country’s beleaguered rail network.
Menkes anticipates renewed focus on introducing high-speed rail to
the US. “It’s an easy business case to show the return on investment
where there’s a high frequency of travel,” he says.
He also points out that barely any US cities have a rail service
connecting their airport and downtown, and hopes that shortcoming will
be addressed.
Transport infrastructure
Donald Trump promised to repair US’s crumbling infrastructure but did not. According to USA Today,
Biden has “pledged a big investment in roads, bridges, airports and
transit systems.”
Surrounded by technocrats rather than cronies, Biden’s
chances of delivering have to be better so long as Republicans do not
prove obstructive if their support is needed.
Regulation
The
US lags behind Europe on various rights relating to travel, from
passenger protection to data privacy, although some efforts were made
during the presidency of Barack Obama.
After that, “We saw very little regulatory activity under the Trump
administration,” The Travel Technology Association president Steve Shur
said on The Beat’s webinar. “Under a Biden administration there might be some more regulatory actions and rule makings.”
A key early decision will be how to respond to the European Court of
Justice’s invalidation of Privacy Shield and tougher tests for standard
contractual clauses. These are the main mechanisms by which US
companies, including many in the travel industry, import data about
European citizens. It is not clear yet what approach Biden will take to
this messy issue, but his administration is expected to introduce
legislation to improve data protection for US citizens.
Travel bans
Trump
reversed the opening up by Obama of travel to Cuba. Policy is likely to
switch again under Biden. Expect also a lifting of at least some of
Trump’s ‘Muslim ban’ that restricted entry and visas for visitors from
around a dozen countries.
Arranging visas for travel to the US generally became more difficult
during Trump’s single term but may relax again. “For international
businesses, Biden’s victory can be seen as a signal to review mobility
plans and reconsider overseas assignments and transfers to the US as
viable prospects,” says Personnel Today.