By Rodger Cook, General Manager – Global Security Services for Cover-More Group’s global traveller assistance company World Travel Protection
Disruptive events that have a global impact on business travel can occur at any time, with little to no notice. While they can range in scale from political coups to the global shock of the 2001 September 11 attacks in the US, they are a powerful reminder about the complexity of global business.
And the need for robust risk management.
When these ‘global shock’ events unfold, their impact on the security environment can immediately drive near-global changes that are either permanent or extremely long-lasting. Think changes to airline security after 9/11 or the rapid proliferation of weapons after the 1991 collapse of the Soviet Union. While this kind of impact is predictable with effective intelligence assessment and planning, the secondary effects can be a lot harder to foresee, creating uncertainty.
It’s something we’re seeing play out now in modern business travel.
As per the ongoing news coverage, Russia and Ukraine are locked in a war that shows no signs of a ceasefire. And, while it may seem on the surface to be a localised conflict based on factors like ideology, perceived threats and territory, its impacts have been far more widespread.
The impact on travel
After the war began, there was a significant downturn in travel, particularly in Eastern Europe – and it wasn’t just restricted to Russia and Ukraine. Countries such as Latvia and Finland also recorded a decrease in flights in the initial stages, although these later returned to normal levels. Ongoing impacts include flight path disruption, with some commercial airlines avoiding the risk of flying over Ukraine, and Russia banning certain flag-carrier airlines and imposing higher tariffs on others.
Compounded by these disrupted routes, general uncertainty and increased costs associated with rising oil prices, the war’s impact on regional and international travel has been significant. The tourism sector contracted, at a time when it was only just rebounding from the pandemic. The biggest impact on global leisure travel confidence occurred in the Asian and US markets, which had historically been the largest consumers of travel to Europe.
Today, companies remain reluctant to return business travellers to certain areas, particularly those in the immediate region. As one sector example, many tech companies which housed offshore data centres and support staff in Ukraine were forced to return to the more traditional region of Asia. They are yet to return as the perceived risk remains too high. Other impacts on the horizon include the need for the world to deal with the issue of displaced persons.
The road ahead for corporate travel
As it stands, recent non-leisure travellers to the areas of Europe directly impacted by the conflict have understandably been mostly Non-Government Organisations and journalists. This has now expanded to such sectors as construction and organisations looking to help rebuild. While they wrestle with personal security concerns around travel to this region, other considerations include the supply of essential services like gas in winter, and even the safety and security of water, power, and mobility.
There is a sense of urgency in some sectors to support the ongoing conflict or recovery efforts. But with the wartime situation ever-changing, businesses that need staff to travel to affected countries are struggling with reduced flight availability, the impact of delays on productivity and increased costs. It is to be expected that questions are being asked about the return on investment (ROI) of operating in these environments.
Another significant concern is the availability and cost of insurance. Specialist brokerage firms are fielding requests from myriad sectors to cover equipment and staff travelling to an environment many countries have advised them not to. There are several boutique insurance houses that provide this special risk coverage. Their understanding of the environment and the precautions that need to be taken to operate in this space helps them manage the associated risk.
Learning from the past to move forward
We can learn from previous shock events about how to support organisations with travelling populations. The impacts from 9/11 or the Arab Spring anti-government movement in the early 2010s were significant. Travellers were unwilling to get on planes, put off by delays, reduced availability of commercial air seats and a perceived risk in flying. Now, as back then, the war in Europe – coming on the back of a global pandemic – has demonstrated that resilience, preparation and protection remain crucial. Conducting an informed risk assessment and engaging with specialist intelligence resources will help organisations support business travellers, and identify and mitigate risks, not just physical but also productivity, reputational and financial. Having a team that can get you out of trouble if something goes wrong has never been more important. As the saying goes: “It pays to be prepared.”
Rodger Cook is General Manager, Global Security Services for Cover-More Group’s global traveller assistance company, World Travel Protection, with 30 years’ experience working in high-risk destinations supporting travel risk management programs.