In the wars

first_imgIn the warsOn 6 May 2003 in Personnel Today Previous Article Next Article The lure of the worlds far flung regions has been hit by a run of tragicevents, but while it may have lost recent battles, the travel industry isconfident it will bounce back with a healthy glow. Isabel Choat reportsAnyone who works in travel and tourism knows how sensitive the economichealth of the industry is to factors beyond their control. Natural disasters,airline strikes, civil unrest, terrorist attacks, and now severe acuterespiratory syndrom (SARS) – the list of global events that can send a strongholiday booking pattern spiralling downwards goes on and on. But by far theworst thing that can happen is international conflict. While other factors can have a devastating effect on tourism to individualcountries – bookings to Bali, for example, plummeted after the nightclub bombin October last year, causing a $1.3bn drop in tourism income for Indonesia –war knocks consumer confidence, affecting travel to virtually all destinations,regardless of their proximity to the trouble spots. Even the September 11 terroristattacks, which forced several airlines into Chapter 11 bankruptcy and promptedwidespread job losses, turned out to be a short-term crisis. Many companiesadmitted off the record that the job losses had been on the cards anyhow, andby January 2002, bookings were picking up again as cheap airfares and packageslured tourists back to their favourite holiday spots. War, however, is a different story. The 1991 Gulf War led to the collapse of120 travel and tourism businesses, including industry giant InternationalLeisure Group. Those companies that survived did so by making widespreadredundancies – in hindsight, a policy that turned out to be a knee-jerkreaction which caused more problems than it solved. “We were already sliding into recession in the run up to the Gulf Warand when it hit, companies panicked and started to cut staff,” says JuliaFeuell, director of travel recruitment consultancy New Frontiers. “We would put a job ad out and the phone would ring off the hookbecause so many people had been made redundant. From a recruitment point ofview, it meant you would have a fantastic shortlist of candidates for any job.The problem was, when bookings started to come back after the war, there was asevere skills shortage; companies didn’t have the staff to cope.” In the run-up to the 2003 conflict, many people working in travel fearedthat history would repeat itself – another Gulf War, another slew of job cutsand failing businesses. Reports on ailing company MyTravel, one of the ‘bigfour’ travel firms, appeared in the papers every week, if not daily. It isslashing 2,000 jobs worldwide (700 will be lost from the 15,000-strong UKworkforce) as it struggles to keep its head above water. But although there are pockets of redundancy the doom and gloom is notuniversal. TV Travel shop may have made 70 home workers redundant at the end oflast month, and BA has brought forward its downsizing programme (it is making13,000 redundancies, mostly in the UK) from March 2004 to September this year,but most businesses are cautiously optimistic and insist that they are notplanning to cut staff. “MyTravel obviously had its own internal issues for a long time; it wasalready in the low point of its business cycle before the war started,”says Angus Chisholm, director of travel recruitment consultancy, C&MRecruitment. “But generally, the travel industry hasn’t been hit as badlyas last time. As a recruitment firm we are a good barometer of what’s going on.Business is about 5 per cent down, but we’ve only had one slow week sinceJanuary.” His comments are borne out by what the HR directors of the major players aresaying. Holiday bookings may be down by up to 50 per cent to the worst-hitdestinations, but tour operators are doing all they can to avoid slashing jobs.”We are not making collective redundancies; our whole approach has beenabout reducing any discretionary expenditure. We are looking at the number ofjobs directly related to the sales we are making,” says Dominic Mahony, HRdirector of TUI UK, which owns Thomson Holidays. “For example, the currenttrend is towards late bookings, so on our teletext channels we want to maintainnumbers, but in the retail division [high street shops] we need to cut our6,000-strong staff by about 150, and we are doing that through naturalturnover. “We have a general recruitment freeze in place, but we are taking anintelligent approach to it – rather than stopping altogether, we are stillrecruiting for essential roles. For instance, we have just taken on an ITspecialist,” Mahony adds. At TUI UK, job-specific training – such as training holiday reps before theyare posted abroad – will continue, but longer-term development plans have beenput on hold. Face-to-face meetings have been reduced in favour of electronicand written communications, there is an overtime freeze and staff have beeninvited to take unpaid leave of up to five days (those who take fiveconsecutive days get one day paid), but so far jobs are safe. Its rival First Choice has taken similar steps, asking call centre staff tobank hours in quiet periods, offering unpaid leave and halting non-essentialrecruitment. “Our business model, particularly since September 11, has been one of tightcost control and a very prudent approach to capacity [airline seats and hotelbeds] management. Our main focus and message to staff is that it’s business asusual,” says Jacky Simmonds, head of HR for First Choice holidaysdivision. Paul Kennedy, the new group HR director at E-bookers, is equally upbeat. Hismain concern at the moment is ensuring effective communications to avoid staffjumping to their own conclusions about the health of the business. “One of my first tasks is to take on an internal communicationsspecialist for a six- month contract who can put a robust communicationsprogramme in place and ensure consistency across our European and Indianoffices. “The message we are relaying to staff is that the business is in prettygood shape, despite the war and the SARS virus.” Kennedy says there are no plans to reduce headcount. In fact, there are noplans to make cuts anywhere: recruitment, training and working hours have allbeen unaffected. Now in the final stages of a massive reorganisation programme which startedin September 2001, Thomas Cook claims it is in a much stronger position thanmany of its rivals. More than 2,000 of its 14,000-strong workforce were maderedundant at the beginning of 2002 as part of a drive to take £140m worth ofcosts out of the business. Pay and recruitment freezes, salary cuts and shorterworking hours were all imposed at the time; now only the recruitment freezeremains. “We know times are difficult but we want to be ready when bookingsstart to recover. All the information we are getting says customers wereputting off their travel during the war, but they intend to travel later in theyear,” says group HR director of Thomas Cook UK, Fiona Rodford, who joinedthe company in 2001 to oversee the restructuring process. Kennedy agrees one of the primary concerns is how to deal with the expectedinflux of bookings now the Iraq war is over. In a survey carried out byAssociation of British Travel Agents, only 6 per cent of the of 500 respondentssay they will not book a holiday at all this year, suggesting there will be asudden surge once consumer confidence returns. All this positive talk may smack of companies putting on a brave face in thehope that business won’t suffer as much as it did in 1991, but their view isbacked up by comments from the recruitment sector. “Companies looking for staff think it’s a buyers market at the moment,but it’s not. We’ve had two candidates turn down jobs this week because theyweren’t offered enough money,” says Feuell. In March, the World Travel & Tourism Council predicted that a prolongedGulf War would lead to more than three million job losses worldwide and wipemore than $30m from the sector. As holiday bookings start to return, followingthe dip caused by the war, it is becoming clear the industry has been sparedthis fate, although with the Foreign Office still advising against travel toHong Kong and Beijing because of the SARS crisis, a sense of uncertainty andcaution remains. As TUI’s Mahony suggests, travel companies are not out of thewoods yet. “You rarely hear people make blanket statements aboutredundancies. We hope not to, but you can never say never.” Case study – Carlson WagonlitBusiness travel agency CarlsonWagonlit employs 1,400 staff at 60 offices across the UK. Sue Kavanagh, HRdirector, North Europe, says trading was already down at the beginning of thisyear, but the outbreak of war and the SARS virus has forced the business totake stock and look at where savings could be made. The first step was arecruitment ban, although she says if a key position became vacant they wouldreconsider.In April, staff were invited to take unpaid leave – a minimumof a week, a maximum of two. It is a policy that Kavanagh says has worked well.”Take-up has been positive, although obviously we reservethe right to review each case individually.” In addition, staff were asked to take any lieu days in April. One potentially controversial step was a ban on all stationerypurchasing. “We’ve probably got enough in the business to last six months;head office is consolidating all stationery purchasing to avoidduplication,” says Kavanagh. It is the small changes such as the block on new stationerythat can dent morale, says Kavanagh , which is why so much emphasis has beenput on effective communication. The HR department put together an action plancovering all the changes, and issued it to managers. It also asked staff tocome up with their own cost-saving ideas. Kavanagh says the current difficulties have brought the HRfunction’s role into sharp focus.”We have a very important role to play in making surewhatever message we want to communicate comes out centrally and is not aknee-jerk reaction. Staff would be stupid not to be concerned about the healthof the business, but we have been through September 11, and hopefully our staffhave confidence that whatever action we take is for the good of the businessand that we know what we are doing. Redundancy will be the last call.” Comments are closed. Related posts:No related photos.last_img read more