Recession Chic in Vogue
Matt Gross is going to have a lot more company (and readers) soon, because recession chic is in and it is now fashionable to be a frugal traveler. Sure, companies are getting tight-fisted about travel expenses, but the key driver for the explosive growth of budget travel is the McCarthyist public condemnation of those flaunting corporate largesse.
Budget Terminal
Mary Ann Akers, Sleuth for the Washington Post, reports that Obama administration officials, including Treasury Secretary Timothy Geithner and Ambassador to the United Nations Susan Rice are flying coach instead of first class.
And the ripple effect of the AIG and Wells Fargo junkets has spread as far as the Retirement Fund Board in Contra Costa, CA. The Contra Costa Times reports that even as the fund lost an estimated $1.3 billion in the first 10 months of 2008, the board was busy jetting around the state and country for a total of 90 trips at locations ranging from Lake Tahoe to New Orleans, often at swank hotels with golfing excursions and other activities. Even worse, the article ends by listing all the junkets planned by the board in the near future.
Luxury retreats on public or corporate funded junkets are so unfashionable that even the travel expenditure of a small retirement board in a corner in California has become a major national story. If these conference attendees had been staying at some small motels in Palm Springs instead of a luxury resort in Lake Tahoe, they wouldn’t be in so much hot water now.
My point here is that even if you have the money to spend on traveling in style, you can’t do it nowadays. Which is why luxury hotels are in panic mode while budget hotels and motel chains are gearing up for an expanded presence.
Late last month, there was a Best Western Business Travel Summit in Toronto, and participants high-lighted how their respective companies are adjusting to the changed scenario. Dorothy Dowling, senior vice president of marketing and sales for Best Western International, said that “Best Western requires its hoteliers to provide complimentary Internet and local phone calls, and many are choosing to offer free breakfast and parking, too. This positions us very favorably with travel managers who are cutting costs in an aggressive way.”
And always first on the draw, the New York Times turns necessity into trendy fashion, with an article about recessionistas – a word which, according to the NYT’s Natasha Singer “reflects the efforts of fashion and beauty publicists to spin the economic downturn as an attractive retail trend.”
Daniel Levine, who analyzes social trends at the Avant-Guide Institute, told Reuters at the recently concluded New York Times Travel Show that “It’s not about hedonism any more.” And he added that destinations which offer “experiences that speak to ‘recession chic’ values are going to do well.”
The recession chic trend, for better or for worse, has now been ’spun’ out from New York’s fashion world to the entire travel industry.
Photo by StarvingFox via flickr (creative commons).
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14 Responses
I haven’t heard anyone criticizing private citizens traveling to luxurious destinations on their own dime. I’d say if you have the money, feel free to travel wherever you want, and you may even get a better deal right now. But in the example of Contra Costa’s Retirement Fund Board, that kind of excess would be abhorrent even in flush times. They don’t “have the money” and their members don’t have the money to support it.
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If you’re talking about ordinary people, I’ll give you that your neighbours won’t be picketing outside your house if you go on a luxury vacation. But for anyone who is in the limelight, it’s really not good from a PR point of view to be seen spending money on a luxury vacation, while those less fortunate are losing their homes and jobs. And these famous people are the ones who set the trends.
When you’re talking about business travel, it’s a whole new ball game. John Thain, former CEO of Merrill Lynch and the No.2 after it merged with Bank of America, went on a ski vacation to Vail – On his own money, and staying at his own cabin bought with his own money. Before he got kicked out of BofA, he was badly roughed up by the media for enjoying a ski vacation (among other things), while his company was in trouble.
Gimme a break. I wish the media could learn a word other than “junket”. It’s so overused (three times in this article alone) that it’s become a lazy catchphrase. Of course no one condones frivolous spending! But many of these events are legitimate business expenses and not “junkets”. If you research your AIG example, you’ll find the company paid less than one-hundredth of one percent of the total sales generated by the almost entirely non-employees who attended.
Never said that the companies are in the wrong. Just telling the story like it is. I agree with you that the media is going overboard on this. It’s become a game, to find the next junket victim and splash it on the front page. That is actually my point. When you have this kind of witch-hunting in progress, it’s well on it’s way to spreading out everywhere, and now it’s turned into budget travel (good) vs. luxury travel (bad). No one gives a darn whether you (or AIG or a small retirement board) deserves the trip or not.
Yes, the media has gone overboard. And this article does not tell the story like it is. Quote: “the ripple effect of the AIG and Wells Fargo junkets” legitimizes characterization of the AIG and Wells Fargo events as “junkets” when closer inspection reveals they are much more likely legitimate business functions. That perpetuates the very media hype you cite and the connotation is exactly that the companies are/were in the wrong.
We’re in a very unfortunate economic situation now and I don’t know the answer(s), but reading about “junkets” all the time doesn’t help and does not tell the truth.
In your own words, gimme a break. I started the article by saying that this is McCarthyist public condemnation. I don’t like it any more than you do. But as a part of the overboard media, I have to see both sides.
And I wouldn’t mind writing an in-depth financial analysis of AIG’s junket, but I’m afraid very few people want to read a page full of figures. It’s much more interesting when you say that they spent $10k on leisure dining, and then explain what leisure dining means, instead of writing a thesis on how extravagant spending in a bar by executives is good for shareholders of a nearly bankrupt and bailed out company.
Guess what I’m saying is that we (as in media) are just giving readers what they want – regardless of whether it helps. If tomorrow people start enjoying a cost-benefit analysis study of junkets, I’ll be happy to oblige.
Either you don’t understand my point or just disagree with it by continuing to refer to “junkets”. No extravagant cost-benefit analysis is needed to see that $10K allegedly spent on “leisure dining” (or whatever) could be a good investment if the diners contribute $200 million to your bottom line. $200,000,000 – 10,000 = $199,990,000. Not very complicated.
I think you’re selling readers short by assuming they aren’t interested in a more honest and accurate description of business events. But thanks for the debate – I don’t think you get it but at least you’re participating! I also really liked and agree with your “McCarthyist public condemnation” line.
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