WILL THE VACCINE ALSO CURE OUR BUSINESS TRAVEL MALAISE?
As the United States appears to be leading the charge in getting shots into arms, countries all over the world are playing catch-up as travel restrictions seem to be staying in place, at least for the time being. So how will businesses, particularly those who are used to sending employees overseas, adapt to a much smaller business travel world?
Having over a year of no travel under our belts, the consensus is that video-conferencing will continue to replace some domestic travel for intercompany meetings but the need for face to face meetings with clients will remain. The Biden administration has brought climate change to the forefront and this combined with the year of little travel means that travel managers will need to be more aware of the carbon footprint that their travel creates and look seriously at what types of meetings must be attended in person.
So when can we expect international travel and domestic US travel to return to pre-pandemic levels?
Domestic travel and international travel will increase at different levels. The general consensus is that domestic travel will increase more quickly as there is not a need for quarantine/self-isolation on arrival at your destination and some of the more optimistic forecasters believe that US domestic travel will normalize by 2022.
Travel into the United States in April 2021 remained 87% lower than in April 2020. It is forecasted that international travel will not return to pre-pandemic levels before 2024. Perhaps this could be sooner, maybe even in 2023. But that is assuming the speed of the global vaccination program increases. The current three tier system for countries; red, amber and green is very fluid and with the exception of Australia, New Zealand and a small handful of others, it’s very hard to predict what will change and when. This adds a worry for companies who need to do planning in advance, as countries can move from tier to tier at short notice, which can mean cancelling trips or having to get employees home at short notice when “moving up the levels” is announced. This always causes a panic and if employees are not home by the deadline they can be made to quarantine or self-isolate. And even if they do manage to get a seat home, they’re going to be paying top dollar.
“BUSINESS TRAVEL IS ABOUT RELATIONSHIPS;
AND YOU CAN’T BUILD RELATIONSHIPS THROUGH VIDEO-CONFERENCING APPLICATIONS”
But things are trending up. In the domestic US market, March 2021 was the most profitable month since the pandemic began. Still, even while supported by spring break it only took travel to 50% of pre-pandemic levels. Travel spending in April 2021 remained 24% down from April 2019, but has improved from April 2020 when it was down 83%. Car rental is back to pre-pandemic levels and hotel stays increase each month but are not expected to meet 2019 equivalents before 2022.
In our global marketplace it is very difficult for an international company to plug a gap with more “local” options. Export levels dipped across the globe during the first wave of the pandemic but these are generally all climbing back to where they were, showing that the makeup of sales has not really shifted over a year down the line. Also, when your client base is international, a local meeting is just not a possibility, while meetings on Zoom can prove very difficult across time zones.
“Business travel is about relationships; and you can’t build relationships through video-conferencing applications,” said United Airlines’ CEO Scott Kirby. And although it’s obvious that UA has a serious dog in the business travel fight, there’s a lot of truth in those words.
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