Business Travel in a World Emerging from Covid-19
There’s no getting away from the fact that the past two and a half years have been incredibly challenging for the business travel industry, with the travel sector as a whole one of the most badly impacted by the COVID-19 pandemic. But as we emerge from this period of unprecedented economic decline are there now signs that the corporate travel world is staging a recovery and how will travelling for business change in the post-pandemic landscape?
As we previously reported, 2020 was the first time in ten years that business travel saw a drop in terms of passenger numbers and total spend. As China battled to contain the coronavirus outbreak, routes in and out of the country were heavily restricted, airlines began culling huge swathes of scheduled flights around the globe and the US effectively closed its borders to all but essential travel. In short, the outlook for the travel sector was bleak.
How Business Travel Suffered Attack from All Sides
Whilst very few areas of the economy were safe from the pandemic’s ravages, the impact on the travel industry, and corporate travel in particular, was especially hard felt. First up, the strict travel restrictions that were being implemented by countries across the world simply prevented business travellers from being able to make their originally scheduled trips. Never mind that the flights were being cancelled, the destinations weren’t within reach anyway due to being off limits to foreign visitors.
When countries were open for business and being served by travel routes, the confidence in the sector was at rock bottom. As nations constantly changed their entry requirements to attempt to curb the spread of various emerging variants of the virus, travellers couldn’t be certain from one day to the next that they’d be able to pass through border controls. Not to mention that the idea of sharing a crowded plane with potentially infected passengers had hammered confidence in air travel.
What’s more, with the business world quickly adapting to the ongoing situation a growing trend towards utilisation of online conferencing platforms such as Zoom and Google Meet was only hastened. Being forced to rely on online meetings where once face to face interactions would have been standard left a cloud hanging over the very concept of needing to travel for meetings and events.
A Devastating Impact
By June 2021 corporate travel spend was just 10% of pre-pandemic levels as the global economy tanked with an estimated $4.5tn and 62 million jobs being lost. In the travel sector the loss in global work hours during 2020 compared to 2019 was equivalent to 400 million jobs, with North America and Western Europe worst hit.
Signs of Recovery
In spite of all the above, the industry is bouncing back and just recently Business Travel News Europe reported that half of businesses expect to surpass their 2019 air travel volumes. With most countries having now removed entry restrictions thanks to the proliferation of vaccines and plateauing infection rates, attention has turned to the future of the business travel sector as a whole.
Some forecasts on returning to business as usual have been a little premature and data shows that a great deal of corporate travel managers had actually expected to be spending more on travel by the end of 2021 than they in fact were. This is perhaps due to the prevalence of the Omicron variant of COVID-19 which was causing concern in Q4, further reducing travel demand.
Next Steps for the Sector
The Global Business Travel Association expects a full recovery for the corporate travel sector by 2025, but what would a full recovery actually look like and can we realistically expect to see corporate travel resume in the same fashion as was common prior to 2020? The likelihood is that demand for travel will certainly continue to increase but it’s whether the industry will see demand for the same sort of travel that’s open for debate.
For one thing the rise in demand for so-called “bleisure” travel (i.e. travel that combines both business and pleasure) seems to have accelerated as more business travellers look to take greater advantage of their overseas trips. Where once a company might have had fairly rigid procedures for making employee travel bookings, the increased flexibility offered by modern travel booking portals and specialist corporate travel management providers allows for more customised itineraries.
Furthermore, rising awareness for sustainability in travel is likely to see more business travellers making conscientious decisions with their travel choices, to seek more planet-friendly options. We therefore anticipate a greater demand for carbon offsetting and the provision of alternative routes (e.g. by international rail) where appropriate.
The corporate travel sector has faced incredibly challenging conditions, the likes of which we can only hope we’ll not see again, but thankfully the data backs up what we’ve always known – that we’ll be back stronger than ever!