By Joe Brancatelli
November 13, 2008 -- In my Portfolio column this week, I discuss the sharp decline in business travel and the doctrinal belief that business travel is a leading indicator of an economic downtown. What I do not mention in Portfolio is the tail end of the doctrine: Business travel is the last indicator to turn upward in good times.

And that leads me to ask the simplest of questions: Now what?

If we are in for a long, hard decline in the economy and in business travel--and we are--what's going to happen? How do we survive? How do our suppliers--airlines, hotels, car-rental firms, computer and telecom companies, credit-card providers--survive?

History, you will be unhappy to know, is almost no guide here. We are on a totally unmapped road and let me tell you why: Since the airlines were deregulated in 1978, we've never had a recession that couldn't be explained away or cushioned by an external force.

In the early 1980s, during the so-called Reagan Recession, life on the road was somewhat insulated because there were literally dozens of new carriers launching and business travel benefitted from then-unprecedented low fares. The downturn of the early 1990s was caused by Iraq's invasion of Kuwait and the first Gulf War. Business travel was rocked and two aviation icons (Eastern and Pan Am) disappeared. But we knew, eventually, that things would get better. We were just beginning to feel the effects of the bursting Internet bubble when the 9/11 terrorist attacks changed everything. It was tragic, painful and often inexplicable, but we knew that things would get back to normal, even if it was the "new normal" that subsequently developed.

But now? Who knows. This spreading worldwide recession is organic, a genuine economic implosion. There's no external event to finger for the financial pain, no mitigating factor to soften the blow and no guarantee that any of us business travelers--or any of our suppliers--will survive.

Do you have confidence that any one of the Big Six can endure a long economic displacement? The bosses have spent all of the 21st century beating up their rank-and-file employees and their passengers while granting themselves unconscionable compensation packages. Employees have nothing left to give back and passengers have learned loyalty to an airline is a loser's bet. Even after multiple mergers, bankruptcies and bailouts, the Big Six are laden with debt, saddled with aging aircraft and miserable reputations, and hanging on to service models that should have disappeared a generation ago. They are lambs waiting to be shorn.

Southwest Airlines, well-managed and well-positioned, is probably secure, but the same can't be said of any the other alternate carriers. The best of them are too thinly capitalized; the most troubled of them are already operating in bankruptcy--or should be.

The hotel industry is hardly better off. Although it hasn't received much publicity, many of the nation's hotel owners are in the same financial bind as some American homeowners: They are overextended, locked into upside-down mortgages and in debt up to their top-floor Presidential suites. There's no capital and no confidence to help them refinance. The hotel-management firms and the franchise giants that license the famous brand names will crumble as the value of the underlying real estate collapses.

The hotel industry, already overbuilt, has a staggering amount of new inventory nearing completion. It is coming online even as almost four in ten existing rooms are empty on an average night. No segment looks like a promising source to fill those rooms: Business travelers are grounded, leisure travelers can't afford another holiday and overseas visitors, seduced in recent years by an extraordinarily weak dollar, are finding America expensive again as the greenback rebounds.

"I would never say it's hopeless," one 40-year travel veteran told me the other day. "But it sure looks hopeless. I won't lie to you. I'm scared."

By nature, I am a cockeyed optimist and an unabashed fan of the purifying nature of the free market. Normally, I would say let the bad airlines fail and the bad hotels close. The next generation of travel providers will have new ideas and new solutions. In Burning Down the House, I even urged us to embrace the fire I saw coming after 9/11.

But it's different this time. If we're spending hundreds of billions to bail out Wall Street bankers and brokers, why shouldn't we bail out the airlines? As much as we hate them, they now don't seem any more mismanaged than the banks. And hundreds of thousands of airline workers have already lost their jobs or their pensions. Those that remain are working for wages not seen for decades. As a society, how can we justify "saving" the jobs of bankers and brokers who earn six- or seven-figure salaries while telling a $40,000-a-year flight attendant to suck it up--again? If guys at the top of the financial heap get theirs, why should Joe the Baggage Handler get shafted--again?

As an American, I'm getting awfully tired of watching Treasury Secretary Henry Paulson explain that he's working to save his friends and former colleagues in the financial industry, but we should turn a blind eye to a sheet-metal worker at GM or Ford. I have no doubt that the airline honchos and hotel bosses have insulated their nests against their own mismanagement. But what about the line workers who are left at the airlines? What about the housekeepers and the room-service waiters at the hotels and the clerks at the car-rental firms? Why are they and their fellow ranker and filers at the carmakers told to hit the road and leave their health care and pensions behind? As taxpayers, we are now picking up the tab for the financial industry's bonus payments and stockholder dividends because they were guaranteed by contract. But heaven forfend a union contract that covers Hazel the Housekeeper be treated with such reverence.

What are cities going to look like if dozens of hotels close their doors and thousand of workers are thrown on the streets? What are our suburbs going to be like if all those nifty office parks empty out and those limited-service hotels go to seed?

Personally, I've spent more than 30 years on the road and I don't care if I never see another airport or another airline lounge or another hotel room. I am ready to stay home, grow my own food and watch the river flow past my window.

But this isn't about me. It's about us. Business travelers, the industries we support and the businesses that support us are an integral part of our national economic well-being. I don't know how we reverse this downward cycle. I don't know anyone who knows. I don't know what will happen to business travelers and their suppliers and the people who work for those suppliers.

I wish I had some answers. I don't. I just have that one question: Now what?
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.

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This column is Copyright 2008 by Joe Brancatelli. JoeSentMe.com is Copyright 2008 by Joe Brancatelli. All rights reserved.