The pandemic has changed many habits of the business world and the big question lies is that when it will be safe to go back to pre-pandemic patterns. But for business travel, the question is more like Who will want to?
Corporate chiefs have noted the effectiveness of video-conferencing tools and the money they saved. With increasing concerns of climatic changes, many have also pledged to reduce carbon emissions.
According to Global Business Travel Association (GBTA), the worldwide spending on commercial travel won’t get back to the pre-pandemic peak of $1.4 trillion until 2025. The latest Census Bureau survey of small businesses in the US found that only 27 percent of companies are planning to spend money on travel in the coming six months.
“The outcomes of meetings held on Zoom vs those held in person are not that much different, but the costs are night-and-day different. It will be hard to justify the costs that were once supported,” Richard Curtin, director of the University of Michigan Survey of Consumers, stated.
New ways to tackle new difficulties
In a recent study by management consulting firm Oliver Wyman, it was found that most business travelers are confident that they can maintain existing commercial relationships and build new ones with the help of teleconferencing.
The GBTA states that the pandemic’s impact on the business travel industry has been about 10 times as severe as the September 11 attack and 2008 financial crisis. This time, companies have found better substitutes, a theme that surfaced on recent earnings calls.
“We were able to save about $1 billion in transportation cost. Our sales teams found new ways to reach customers,” Brian Olsavsky, Amazon’s chief financial officer stated last month. In 2019, Amazon ranked second after Deloitte among the 100 biggest corporate travel programs measured by the US booked flights, according to Business Travel News.
“The wider travel industry is expecting a lift in the short term from pent-up demand for leisure trips, as the rollout of vaccines makes would-be vacationers feel more comfortable. It’s our expectation that business travel will lag consumer travel,” said Jeff Campbell, CFO of American Express, a multinational financial services company.
Similar to other pandemic-driven business trends, like the shift from offices to remote work, there’s also a group that thinks changes in travel habits will prove temporary. But debates may not be resolved until the health emergency is over. Experts say that even if the return to business travel is slow, companies won’t easily ditch methods that have worked for them earlier.