Corporate travel, which took a big hit during the pandemic, is showing green shoots again. But will it approach prepandemic levels any time soon? How will the shift toward remote work affect the return of internal meetings, client visits, and conferences? The answers to these questions will determine how businesses and travel providers pivot to function in the new normal.
Shortly after the COVID-19 pandemic brought global travel to a standstill, one thing became clear: Corporate travel would face a slower return than leisure, almost as surely as international would lag domestic. Although much remains to be seen, these predictions have largely borne out. US travel suppliers have started seeing some relief in the first half of 2021. A successful vaccine rollout, and updated Centers for Disease Control and Prevention (CDC) guidance designating travel as safe for vaccinated people,1 have ushered in the return of domestic leisure travel (for more details, read our report, Keen but cautious).2 But corporate travel faces a slower return, thanks to a more complex set of considerations.
Conferences and trade shows, which account for a significant volume of business trips, remain mostly virtual. Many offices remain closed, which limits sales and project-based corporate travel from both sides: Companies find it hard to ask employees to take work trips, and many of their clients, vendors, and partners have yet to open their doors to employees, let alone visitors.
These conditions are temporary though. Conferences and other industry events have begun their comeback, in live and hybrid formats, which will accelerate in the fall of 2021. Some workers returned to offices in summer 2021, and more will do so this fall. The eventual scale and shape of these staples of corporate life are unclear, but they are returning, and an uptick in corporate travel will follow.
Despite the relative success many companies experienced through a year of essential-only travel, business leaders realize the value of face-to-face interaction. And similar to the return to office-based work, road warriors fall on all points of a spectrum: from eager to return to airports, hotels, and conference rooms, to convinced they can do their work effectively with significantly less travel.
The reality falls somewhere in between. Competition and growth imperatives will necessitate a resumption of business travel. But travel use cases have been reevaluated based on their impact on the bottom line and the environment, as well as how well they can be replaced by now widely adopted tech platforms.
This report relies on a combination of qualitative and quantitative research to gauge the timing and nature of business travel’s return (for more details, see the sidebar “About the research”) with quarter-by-quarter projections through the end of 2022. And Deloitte’s Why We Fly Matrix offers a structured view of the implications that tech replacement could have for travel over the longer term. The matrix places travel use cases into four categories based on their importance to business success vs. the effectiveness of technology replacements. This analysis uncovers the types of travel likely to lead the return, and types that likely face long-term reduction. Travel providers that prioritize accordingly, and adapt their products, services, and messaging to meet changing needs, may stand to capture greater share of spend as it returns over the next few years.
Timing the return
Most US-based companies’ travel budgets declined by 90% or more beginning in early 2020. Companies restricted travel to essential trips, and added layers of executive approval. Client-requested visits, servicing of equipment, and fulfillment of government contracts constituted much of the travel deemed essential. Travel segment share shifted, as many opted to drive instead of fly and sometimes extended trips to minimize the number of flights taken.
As companies plan for the coming quarters, most have not identified formal triggers for opening up travel, but leaders have their eyes on a few key developments (figure 1). Public health milestones lead the way. In interviews, executives reported closely watching vaccination and infection rates, but lacked specific targets. Survey respondents also gave public health indicators the highest importance, with about four in 10 ranking each of these among the top three developments that could boost their companies’ travel volume. The reopening of offices—for companies and their client bases—will also unleash some travel demand.
Return to a world transformed — Source: Deloitte
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Originally Appeared On: https://www.hospitalitynet.org/news/4105993.html