Business travel is staggering back from the brink of death during the pandemic. But the market will likely be a lot leaner than in the past, especially now that many workers have acclimated themselves to using Zoom instead of meeting in person.
In exclusive interviews with The Business of Business, founders of popular travel sites TravelPerk and Lola, as well as airfare deal-finder Scott’s Cheap Flights, read some tea leaves for us on what we can expect the future of business travel to look like. Scott’s Cheap Flights is mainly used by leisure travelers, but co-founder Scott Keyes was still able to offer a reasonably informed opinion based on his experience in the industry.)
This year, governments have been lifting restrictions and vaccinating their citizens against Covid-19. “Business travel is rebounding as vaccination roll-outs progress and restrictions ease,” Avi Meir, co-founder and CEO of TravelPerk, told us. TravelPerk specializes in business travel.
“Even though there are still hurdles to overcome, we are seeing plenty of green shoots in our key markets across the U.S. and Europe,” he said.
Indeed, Barcelona-based TravelPerk has been adding jobs at a quickened pace over the past few months compared with the prior year or so, suggesting that business is on an upswing, according to data collected by Thinknum.
Business travel, long a lucrative staple for airlines and hotels, took a beating in 2020. Countries closed their borders, companies banned work trips and employees said “no” to traveling for work. As a result, global business travel spend plummeted 61% in 2020, according to the World Travel & Tourism Council.
But now the seeds of a possible turnaround are stirring. Last month, two-thirds of business travel suppliers and corporate travel managers reported their companies allow non-essential domestic business travel, up from 61% in September, according to the U.S. Travel Association. The U.S., the second-largest business travel market in the world, also lifted restrictions on vaccinated international travelers on Nov. 8.
Not only are companies and governments making it easier to travel — workers increasingly want to venture away from home. Last month, 78% of corporate travel managers say their colleagues are “very” or “somewhat” willing to travel for work now, up from 65 % six months ago, according to the Global Business Travel Association.
Some travel industry executives have noted substantial improvements in their business travel segment in the third quarter. In an earnings call on Oct. 13, Delta Air Lines CEO Ed Bastian told financial analysts, “Business travel has picked up over the last month, with volumes now reaching the highest level we've seen in the recovery. In the last week, our domestic business volume was close to 50% restored.”
However, the market still has to climb out of a deep hole. “There's so much further to go to get back to where we were pre-pandemic, both in terms of the number of flights and in terms of the number of people flying,” Scott’s Cheap Flights founder Keyes told us. “The amount of international travel right now for instance is still down 40%, 50%, in some cases 60% on some routes to where it was in 2019. And so there's still a lot of ground to make up from where we were.”
Business travel will probably take a long time getting back to pre-pandemic levels. Global business travel spend is expected to rise 26% this year compared with its 2020 level, followed by a further increase of 34% in 2022, according to the World Travel & Tourism Council.
“A year from now, or even two years from now, I think business travel is going to be down 30% from where it was two years ago,” Paul English, co-founder of Lola.com, a corporate travel software provider, told us in an interview. English was also co-founder and CTO of travel booking search engine KAYAK.
One reason for the hamstrung recovery is that employees have discovered Zoom is efficient enough to conduct quick meetings, removing the need to see each other in person. “A lot of business travel actually works just fine on Zoom,” English told us. “For a lot of meetings, like this one that you and I are doing right now, it actually works really great.” Trips will likely be scheduled in situations when “Zoom is not ideal,” he added.
Fortunately for the travel industry, not every business interaction is suitable for a video feed. Team-building, brainstorming sessions and cementing deals often go much more smoothly when people can actually be in the same room together.
“Covid-19 has triggered some permanent changes in how we work, but the meetings that matter will always happen in person,” Meir said. “There is just no way to replicate via video the trust, relationships and connection that you can build by meeting in real life,” he said.