Spring Break launched the travel industry into its annual summer frenzy for vacations and leisure trips. And under the radar, business travel has grown for a few weeks, too.
The smaller but more lucrative part of commercial air travel has returned much more slowly than the entertainment sector, as companies remain cautious about employee safety and continue to embrace video conferencing and other remote meeting solutions.
But recent data from many industry groups and analysts suggests a better future, in the short and long term, for business travel than some previously expected.
“In 2022, the industry continues to face challenges associated with the pandemic and an increased responsibility to ensure the safety of travelers and workers,” global consultancy Deloitte said in its 2022 Travel Outlook. “But the green shoots of travel have emerged, along with opportunities to encourage continued growth.”
American Airlines reported last week that from mid-January to early April, ticket purchases by corporate travel agencies increased by about 30 percent, to a level of 36 percent lower than at the same time in 2019.
While this still represents a significant lag, it is the highest level of such purchases since the pandemic began, with the exception of two brief spikes during the 2021 holiday season.
Henry Hartfeldt, president of the San Francisco-based Atmosphere Research Group, said several corporate travel managers he spoke to have reinvigorated their programs.
Although 15-30% of employees have told their companies they are not comfortable traveling yet, Hartfeldt said, “There are others who are very eager to get back on the road.” “They miss the opportunity to communicate with colleagues, clients, or address issues in person.”
According to a 2021 report by the Global Business Travel Association, travel by the professional and business services and real estate sectors has been “resilient” during the pandemic, while others may take longer to recover.
However, people are more likely to travel to industry events and external meetings than company gatherings, according to Deloitte.
The London-based company stated that “trips to visit potential clients and network at conferences will likely come back stronger, while in-house training and meetings will continue to rely heavily on virtual connectivity.”
There is also a huge difference in travel habits between small and medium-sized enterprises and large companies, according to the American Travel Association and industry leaders.
The U.S. Census Bureau reported 5.4 million new job applications last year — a million more than the record 4.4 million in 2020. With the pandemic drastically changing the job market, many Americans are starting to do business for themselves, and that requires attracting clients. and clients.
“We expect out of the epidemic, small business travel will be north at 100 percent, because people are small [and] “Medium companies have to travel,” said Ed Bastian, CEO of Delta Airlines, during a December investor presentation.
“The size of the small and medium business community compared to the company’s business, it’s roughly the same, same group, same population. We spend all the time on the big companies because they are visible, but you have this massive amount of extra travel going on with us.”
Likewise, American Airlines announced in its January earnings call that the small and mid-size business travel segment had recovered 80 percent by the end of 2021, in contrast to a recovery of only 40 percent through larger corporate travel.
In line with these trends, industry leaders say that small business travel will fully recover long before corporate travel. But that’s to be expected, Hartfeldt said.
“Recovering from travel will not be a homogeneous and homogeneous process,” he said.
Long-term outlook
Hartfeldt added that he expects total money spent on business trips to exceed 2019 levels by 2024, but there are many variables that no one can be certain of.
Experts say inflation, gas prices, new COVID variables and even the war in Ukraine will affect costs and enthusiasm for travel, making it impossible to predict a clear path.
What’s most agreed upon, however, is that business travel will eventually return.
“Removing and then restricting travel and gatherings from Americans has boosted the desire to travel, meet face-to-face, and connect,” Michael Massari, Caesars Entertainment’s chief sales officer, said in a USTA report.
“Humans value unique experiences, and make memories and interactions. Meeting is part of our identity.”
