WSJ Reports Travel Industry Slams Obama for Limits on Business Travel

Elizabeth Williamson of the Wall Street Journal reports that The travel industry is taking aim at Democrats’ efforts to limit luxury travel by companies that accept government bailouts with a new advertising campaign that says the attacks on travel are costing jobs. The article is important because it clearly explains the other side of the coin, or in other words, every action has an equal and opposite reaction, or to put it even more simply, consequences.

Certainly the media were correct to report the largesse of AIG’s top salespersons’ conferences and conventions where executives rung up thousands of dollars in alcohol after AIG received an $85 Billion bailout from the government. Spending like that was out of line and in poor taste as long as the taxpayers are footing the bill. However, business travel is legitimate and helps the economy as long as it’s within a company’s budget and the company is profitable and can justify the travel with a resultant revenue stream and return on investment for shareholders. Absolutely travel can be wasteful when travel decisions are made for the wrong reasons. If a company has the money to spend and it’s budgeted and it’s generating a revenue stream that pays for its travel expenses, the travel is fine. If a company is in bailout or bankruptcy and its purpose is a business perk, maybe not so much. Like any other, it’s a complex issue.

For example, when Oprah went on the air and advised her viewers that they could save money by eating at home instead of dining out, the advice made great sense–unless you derive your income from the food service industry. What all the economic analysts are saying right now is people are saving more and not spending money. As long as people don’t spend money, the recession we are experiencing will deepen. It’s all about finding a balance, or as you have probably heard: everything in moderation.

I recently came across an interesting video on YouTube regarding the statement that 1% of the world’s population control 80% of the wealth. The video is attempting to make a political statement regarding the haves and have-nots in this troubled economic period we live in. Take a look:

I think the video is rather interesting on a number of levels. However the fact that 1% of the people control 80% of the wealth isn’t necessarily a bad thing. What’s deplorable are excess and waste at the expense of other people. What’s deplorable are the Ralph Maders of the world who invest hundreds of billions of dollars of other people’s money in scams, profit from the scams, and deprive charities of their operating revenue and others of their livelihoods. I think it’s okay to get rich and to have money. But what’s deplorable are companies that are run into the ground by executive teams that earn multi-million dollar bonuses and stock options and arrange for severance packages while they make poor decisions that result in layoffs and terminations of hundreds of thousands of honest employees just trying to earn their humble-sized piece of the pie.

Should those receiving bailout dollars be required to restrict their business travel? I don’t know. I think every company should act responsibly. I think every company should look at their travel budgets and tie them to resultant revenue streams. But outright curtailment? You have to spend money to make money. That’s why Coca-Cola advertises during the Super Bowl. But you can be smart about your business expenses. For the most part, I agree with the travel industry. The travel industry relies on business travel for their bread and butter. Sales and marketing staff have to travel. Industry professionals need to attend conventions and network and make new connections that spur ideas and innovation.

The key, however, is that travel budgets and expenditures need to be tied to resultant revenue streams and have to contribute in a positive way to the bottom line. Sometimes picking up a bar tab is a way to seal a deal. Perhaps our government shouldn’t be concerned about money being spent for business travel, even luxury business travel since that’s a niche that actually provides for a lot of jobs from hotel management, concierges, bellboys, hotel restaurant staff and the maid that cleans the toilets that can put his or her kids through school with tip money left in the rooms he or she cleans.

What government auditors should be concerned about are the revenue streams generated from that business travel. And if no revenue is generated from a business travel expense, that’s when a business operating with government funds should be held accountable. Businesses just need executives and management teams that are committed to making responsible business decisions and adhering to the highest standards of accountability from every level inside the business. But categorical prohibitions and constraints imposed by the government at the detriment of an entire industry, such as travel? That could be as chilling for the economy as the banks and insurance companies going bankrupt that started the economic avalanche in the first place.

Thanks for reading.

–Matthew S. Urdan

Related posts:

1. Congress Must Create A Bail Out Process
2. Obama: “It’s Too Late to Save Economy”
3. CNN Reports Massive Benefits for Illegal Aliens at US Taxpayer Expense
4. $1 Trillion in Perspective
5. Nationwide Tea Party

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