Business as usual?

The business travel sector has been navigating through challenges brought about by the pandemic. As the sector learns to adapt, it is poised for recovery

Virtual meetings have fundamentally altered the way people do business. Although the ability to connect with each other virtually across the globe in a matter of minutes meant that businesses in the COVID-19 age could operate with some relief, this resulted in the corporate travel sector taking a severe hit. Even with restrictions lifting globally, companies are still expected to keep a tight rein on their budgets, further shadowing business trips in the coming months. Yet, there are a few positive indications that signal the return of business travel.

Spotlighting the future of the industry, ATM 2022 will host two sessions organised by the Global Business Travel Association (GBTA) today, offering insights into the nature of business travel. Ahead of the session, we spoke to Catherine Logan, Regional Vice President – EMEA, GBTA, and Chris Pouney, Associate, GoldSpring Consulting, who highlight what attendees can expect.

POSITIVE FORECASTS

According to the GBTA Business Travel Index – the BTI™ Outlook – global business travel is forecast to have made a full recovery by 2024. The report, which provides a detailed analysis of business travel in 2021, with projections for 2022 and beyond, including post-COVID-19 recovery forecasts, states that the year is likely to end at US$1.48 trillion, just above the 2019 pre-pandemic spend of US$1.4 trillion.

“Global business travel activity has begun its rebound from the sharp downturn brought about by the COVID19 pandemic,” said Catherine Logan. After declining 53.8 percent in 2020 to US$661 billion, global expenditures are expected to have rebounded 14 percent in 2021 to US$754 billion.

The report further states that despite recovery setbacks in 2021, a year-over-year surge of 38 percent is expected in 2022 as recovery and pent-up demand kicks into a higher gear, bringing global business travel spending back to over US$1 trillion.

Recovery will continue into 2023, with global spending rising 23 percent year-over-year as even more international and group travel comes back on track. In 2025, global business travel growth is forecast to slow to 4.3 percent – just below the 10-year average growth rate of 5.1 percent coming into 2020 – ending the year at a forecasted US$1.5 trillion.

Logan explained: “There are many positive indications that business travel is returning, especially over the last couple of months as global travel restrictions have loosened. Business travel bookings continue to build momentum with month-on-month increases, while businesses report an increase in employees’ willingness to travel and to blend business travel with leisure time.

“On average, travel buyers say that their company’s business travel

With corporate travel now showing green shoots, travel industry businesses are strategising to balance their operations to accommodate for this gradual recovery process

bookings are at 33 percent of their pre-pandemic level, while travel suppliers report their business travel bookings are back to 42 percent compared to pre-pandemic levels.”

According to a recent survey of GBTA members, it was revealed that three in four (78 percent) supplier and travel management company professionals currently feel optimistic about the business travel industry’s path to recovery, up from 54 percent who reported being optimistic in the January poll.

Now that more business travel is permitted, the percentage of respondents who reported that non-essential domestic business travel is sometimes or usually allowed increased to 73 percent in February, compared to 66 percent in January. In addition, four in five (82 percent) poll respondents felt that their employees were “willing” or “very willing” to travel for business in the current environment, compared to 64 percent in the January poll.

NEW TRENDS

While things are definitely looking up for the sector, there are several new trends that have begun to impact the industry as a result of the pandemic.

Logan explained: “During the pandemic, the way in which we live, work, travel and think about how we treat our planet and people has changed irreversibly; new trends have emerged creating new opportunities.” She further identified five key trends that have taken shape in the sphere of business travel:

- New opportunities for business travel

“The pandemic has redefined business travel as we once knew it. Travel for business could now include ‘travel for work’ as remote and hybrid working models become the norm and corporates look for ways to bring dispersed teams together. This new way of living and working brings opportunities for business travel.

“Commuting for many is now a ‘new kind of business trip’ as digital nomad lifestyles have become a perk some workers seek. A ‘return to base’ is a necessity for collaboration, team planning and instilling a company culture. There is certainly a direct correlation between a return to the office and a return to business travel, but the rules have changed.”

- People first

“The pandemic put the duty of care at the forefront of any employee policy. The health, safety and wellness of all employees, especially travellers, matters now more than ever. Corporates recognise the need for diversity, equity and inclusion in the workplace when employees are travelling, attending meetings or handling travel arrangements,” explained Logan.

“Travel policy and procedures have changed from a focus on productivity and savings in 2019 to a focus on minimising risk. Special health considerations of travellers – and their families by extension – have now become part of the consideration of the human logistics ecosystem.”

- Sustainable choices

“What was once just recycling in the office has accelerated rapidly over the last two years. Sustainability is now a firm fixture on the corporate agenda, contributing to company objectives and it is at the core of every corporate business plan and responsible travel policy. As business travel returns, there is a much greater appreciation of its impact on the environment. There is an urgency towards carbon neutrality and the need to make responsible choices that weigh up the ROI of a business meeting with the cost, time and environmental impact.”

- Self-service

“The pandemic has accelerated the desire to DIY everything – all in the name of efficient and contactless travel and hospitality. DIY personalisation helps a traveller’s preferences become first choices, from the way we check in, often aided by biometrics, to the way we interact with customer services.”

- Digitisation

“Remote working has fuelled digital innovation and it continues to accelerate within the end-to-end business travel experience – booking, travel, expense, payments and reconciliation. Mobile device proliferation is part of this trend while numerous apps and AI advancements enable everything, from pricing to booking and servicing automation options, to increase accuracy and, of course, speed to resolution.”

ADAPTING TO A CHANGE

“The pandemic brought a seismic shift in the way companies and individuals feel about travel, both for leisure and business,” said Chris Pouney. “Companies have disappeared, some have merged and infrastructure has been removed and right-sized. Also, it has been proved that companies can survive to a point without most travel while life can exist on Microsoft Teams and Zoom. Although, it is well researched that humans require interaction, and growing international partnerships requires the kind of interaction that only jumping on a plane will achieve.”

Pouney stated that while some will be comfortable travelling less, others are desperate to get on a plane again and restart relationships that have stalled for the last two years.

With corporate travel now showing green shoots, travel industry businesses are strategising to balance their operations to accommodate for this gradual recovery process.

Citing an example from the aviation industry, Pouney said: “From retiring older aircraft in fleets to enhancing, expanding or, in some cases, simply introducing premium economy cabins, airlines have readied themselves for the changing needs of travellers, particularly those travelling on business.”

He added: “Travel management companies have needed to enhance their offering, ensuring that their business model can cope with vast and unexpected reductions in transactions, plus realign their service to help support companies with a myriad of administrative tasks that post-COVID-19 travel requires.

“Business travel will change – travellers will likely travel less, but travel more meaningfully. They might choose to stay in the destination for longer periods; transient individual business meetings will likely reduce, but exhibitions, events and conventions, which bring the opportunity to meet multiple people in one go, will flourish.”