In spite of resolutely-optimistic outlooks, new data suggests business travel recovery will take years - that’s if it fully recovers at all.
The U.S. Travel Association estimates that domestic and international business travelers spent more than $300 billion in the US in 2019. The group said that dwindled to about $95 billion in 2020, and won’t fully recover to 2019 levels until 2024.
It’s a perfect storm of pandemic lockdowns happening as virtual meeting technology and convenience was already growing. Zoom conferences can’t replace leisure travel, but many businesses - and business travellers - are happy to do more and more of their work via platforms like Zoom.
One survey by McKinsey and Company predicts a 20 per cent overall reduction in business travel by 2023.
A separate Morgan Stanley survey showed that 63 per cent of corporate travel managers said virtual meetings would replace 11 per cent to 50 per cent of their organisation's travel volume through 2023, while 27 per cent projected they would replace up to 10 per cent.
Only 7 per cent said that virtual meetings wouldn’t replace any travel in 2023.
Companies that said they will never return to pre-pandemic business travel levels may make exceptions for certain regions. That aligns with other experts that say that, if business trips are still in play in the post-pandemic, travel will be more carefully selected.
“Things have changed," said Brendan Drewniany, public-relations director for luxury travel company Black Tomato told USA Today. "There is less expectation to have a volume of back-to-back meetings, and in general the trips themselves have been longer and not as rushed, which is actually a plus.”
Domestic business travel is understandably recovering faster than international business travel. In a survey conducted this month for the Global Business Travel Association, 50 per cent of the 618 companies polled said they already allow non-essential business travel within their own country, with many others expecting to do so in the next three months.
However, only 14 per cent said they would do so internationally, given still ongoing quarantine restrictions and other pandemic measures in place around the world. Unequal international vaccine distribution is part of the contention in these business travel surveys, as it does affect whether and where employees are willing to go.
The motivation behind business travel reductions wasn’t limited to just COVID concerns but included environmental impact, sustainability, cost and time reductions. Surprisingly, 39 per cent cited higher engagement and participation in virtual meetings.
With the shift to virtual comes a shift in the budget. About 52 per cent of respondents expect their organisation's travel budget to be slashed 11 per cent to 50 per cent from 2019 levels. Travel managers on average expect their 2022 travel budgets to be down 17.5 per cent from 2019.
Some managers expect their budgets to be restored between the end of this year through the end of 2023, but nearly a quarter say they think they’ll never get their full budgets back.
