World Crises Seen Changing Business Travel Permanently By SHELLY GARCIA Senior Reporter A major shift in attitudes about business travel could be long-lasting, if not permanent, as executives at U.S. companies rethink their strategy of face-to-face meetings in light of a recent string of world crises that began with 9/11 and culminated most recently by a scare over severe acute respiratory syndrome. Executives at Valley companies are rethinking business travel and foregoing face-to-face meetings whenever they can in favor of alternatives like e-mail and Web conferencing. The anxiety over travel did not begin with SARS. But the shift in the way many evaluated business travel that began with the terrorist attacks of Sept. 11 has been exacerbated by concern over the potentially life-threatening disease. “What I see is people trying to avoid travel as much as they can,” said Ron Nechemia, president of Eurorient, an international investment and merchant banking group based in Encino. “Before, it was, ‘hey, let’s get together. Now you see people will use every other means before they get to physical contact.” Nechemia, an inveterate traveler, just returned from China, but he refused to go to Guangdong province, where SARS is believed to have originated. Other local companies have canceled trips to all destinations in Asia and other countries where SARS cases have shown up. Officials at Rem Eyewear in Sun Valley are exploring alternatives to their regular product development trip to factories in Shenzhen and Xiamen, said president and chief executive Mike Hundert. Semiconductor maker Diodes Inc. in Westlake Village has placed what sales and marketing vice president Mark King calls “informal restrictions,” on travel to its manufacturing facility in Shanghai. The handful of employees that oversee production at Calabasas women’s ready-to-wear maker John Paul Richard, which manufactures in a number of locations throughout Asia, will “think twice” about making the trip now, said vice president Ed Redding. And at Cherokee Inc., the international licensing company based in Van Nuys, e-mail will substitute for travel to Asia for the time being, said Stephen Ascher, executive vice president who heads up new business globally. Low death rate SARS so far has affected some 2,600 people worldwide, killing a little over 100. That fatality rate is small compared to other diseases and even influenza, which kills far more people annually. And so far at least, most of the cases have been limited to those who have traveled in Asia. No one in the U.S. had died of SARS as of last week. But while the statistics seem to be in the traveler’s favor, the lack of information surrounding the illness what causes it, how it is spread and whether it is airborne and how to cure it has put some businesspeople on edge and has even inspired some bizarre behavior. John Paul Richard’s Redding was returning from a trip to Asia just as SARS began to appear in international headlines. He reached for a remedy he says he has been using for several years. His doctor has advised him that Neosporin applied topically could help reduce the chance of colds transmitted through the ventilation system in airplanes. “I got this tube of Neosporin and I’m just shoving it in my nose out of sheer paranoia,” Redding said. “The flight attendant came by to ask me if I wanted more coffee, and I had the salve coming out of my nose, and she thought, ‘Oh my God, he has it.’ The look in her eyes was sheer terror.” Redding feels fine, but back in the company’s factory in Guangdong province, factory workers have been told not to report to work if they or anyone in their family is sneezing or coughing, and everyone is wearing surgical masks. Travel advisories issued by the World Health Organization have prompted executives who might otherwise feel compelled to put business interests ahead of other concerns to cancel some plans. But many companies had already begun to redraw the parameters for business travel long before the first case of SARS was uncovered. “I think we’re getting a lot more efficiencies with everything going on,” said Ascher. “There does need to be face-to-face contact, but for the most part we’re a lot more efficient than we were five years ago, even two years ago, at getting things done through Web links and other methods.” With the terrorist attacks of Sept. 11 and the growing realization that terrorism has become a global phenomenon, increased security at airports, concerns centering around the war with Iraq and escalating anti-American sentiment, some business trips have already been replaced by technologies such as Web conferencing, e-mail and even the old-fashioned conference call. And the days of getting on a plane and visiting the client at the first sign of any problem are over, many say. Efficient travel Executives at Cherokee, for instance, visit new accounts frequently, but once the business is established, they cut back on the travel schedule. “On a new account, we’re there on a monthly basis,” said Ascher. “(Later) we try to go every other month, whereas a year ago we were going every month. You try to become more efficient. Those trips take a lot out of you.” Many companies too are finding that traditional national and international trade shows are not the only opportunity available to nail down a sale. Attendance was down by 25 percent at a major eyewear trade show in New York, last month, estimated Allen Fishman, marketing director for Revolution, a maker of clip-ons and other eyewear based in Simi Valley. But while that meant Fishman’s order writing declined by about 50 percent at the show, the company will make up most of the business when sales reps call on accounts directly. Still, the chance for suppliers to show their wares at these shows offers an opportunity to generate excitement that can’t be duplicated on the road, and in other businesses, some trips are still crucial. Nechemia is in the middle of two $100 million deals to build district heating systems in China, deals that simply cannot be put off indefinitely. “I think I can hold out for two more weeks,” he said. “But I cannot hold it for two months. We will have to figure out a new method,” he said. At Rem, most of the preliminary product development can be done long distance by mailing prototypes back and forth and communicating by e-mail. But the real crucial parts can only take place face-to-face in the factory. “There’s no better place to develop product than working within the factories,” said Hundert. “We’re trying to figure out how best to send ideas, designs and prototypes back and forth in an efficient manner. There’s no doubt about it. We will lose some opportunities for creating better products.”
