The pandemic and the shift to video communication likely mean that business travel has been forever altered.
While some thought the level of business travel would rebound as COVID-19 waned, or eventually even eclipse what it was pre-pandemic, it appears as though that return is not happening anytime soon. A recent report by Morning Consult that surveyed more than 16,000 people worldwide concluded that the dampening of business travel might be permanent.
Among those in the United States who traveled at least three times annually for business prior to the pandemic, a whopping 40% said they never expect to take another business trip. More than 50% of those asked the same question in the United Kingdom and France said the same.
Additionally, the share of those surveyed who said they intended to take a trip that involves work in some way declined 10 percentage points between February and May of this year, while the share of those intending to travel for leisure remained the same.
Larry Yu, a professor of hospitality management at George Washington University, told the Washington Examiner that one of the biggest factors behind these numbers is the increased acceptance of technology that facilitates business interaction during the pandemic.
While holding a crucial meeting virtually might have been unthinkable to a company just three years ago, doing so is now commonplace and, in some cases, standard practice. In just a short span of time, the security and sophistication of virtual communication platforms like Zoom have improved and gained wide institutional acceptance.
There are some obvious upsides (and downsides) to virtual meetings. For example, having an important or lengthy meeting over Zoom can allow the participants to record the meeting for reference later. Virtual meetings can also afford the parties more seats at the table than the number of participants that might fit at a boardroom table.
But face-to-face video isn’t the only technological improvement. Sometimes, the focus of a business trip might have been to sign a massive contract or other critical financial documents. Technology to have parties securely sign documents remotely, such as the services offered by DocuSign, gained acceptance during the pandemic.
The Global Business Travel Association has also grown more pessimistic about rebounding business travel. The group said that while business travel spending in 2021 increased by 5.5% to $697 billion, the number is still far below the $1.4 trillion spent in 2019, right before the pandemic took hold.
When it released a similar report last year, the GBTA said it expected a full rebound in business travel by 2024, but in its newest report, it predicts world business travel will not return to pre-pandemic levels until 2026.
GBTA CEO Suzanne Neufang said there are several factors, including inflation, lockdowns in China, and the war in Ukraine pushing back against global demand for business travel.
“The factors impacting many industries around the world are also anticipated to impact global business travel recovery into 2025,” Neufang said. “The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026.”
Yu pointed out that with inflation exploding (prices are up 8.5% in the 12 months ending in July, according to the consumer price index) and fears of a recession, cutting business travel can slash operating expenses for a business.
For example, say an executive at a company in New York City needs to travel for a single meeting in London. Costs for that trip add up. As of Monday, the cheapest round-trip flight to Heathrow Airport in business class would be about $5,500. A hotel stay could tack on another $300 and, with food and in-city travel, the total price tag for the two-hour meeting could end up running a company more than $6,000 — translating to $50 per minute.
“Now, they can really do it remotely and through very secure systems,” Yu said of many meetings, noting that businesses can save those travel expenses amid high inflation and the potential for a recession.
There also may be another factor dampening business travel — increasing acceptance of environmental, social, and governance principles.
Amid heightened scrutiny for contributing to emissions, some businesses might choose to tout a commitment to avoiding air travel that increases the company’s carbon footprint.
Because of how long business travel has taken to rebound, leisure travel has been made a bigger priority for companies like hotels that focus on travel and lodging. Yu said one bright spot on the business travel landscape is the return of business conventions and conferences.
With simple meetings between two parties, companies may consider the costs of national or international travel as outweighing the benefits, but massive business conferences offer a wide array of opportunities that couldn’t be afforded over Zoom. One example would be getting drinks with a prospective client an hour before an educational breakout session followed by a networking dinner.
Some of these conferences and conventions are massive and bring huge economic benefits to the host cities. This year’s Wedding MBA, an annual conference for wedding vendors, is expected to bring more than 5,000 people to Las Vegas, and with that comes filled hotel rooms and packed restaurants.
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There is also some hope for business travel coming from the developing world. While 40% of U.S. business travelers in the Morning Consult survey didn’t expect future business travel, a mere 14% in India, 17% in China, and 21% in Brazil said the same.
Yu said that culturally, non-Western cultures might put greater importance on face-to-face meetings than executives in the U.S. and Europe. Future business travel growth could be seen stemming from companies in those parts of the world.
