The Future of Business Travel
There is no question that the Covid-19 pandemic has had an extremely chilling effect on business travel. In light of travel restrictions put in place to curb the spread of the virus in April 2020, US airline passengers decreased by 96 percent compared to 2019.
Additionally, 89 percent of business travellers around the world stopped travelling when their region implemented travel restrictions during the pandemic.
Business travellers are hugely important to the global travel and hospitality sector, spending more than $1.4 trillion in 2018. That’s around 21.4 percent of the travel and hospitality sector’s income.
Since corporate travellers often invest in more expensive or refundable fares, they generate around 55 to 75 percent of many airline’s profits while making up as little as 10 percent of their passenger numbers.
There does, however, seem to be a light at the end of the tunnel for business travel. In light of recent vaccination efforts and a relaxation on some travel restrictions, the number of business travellers flying has increased by 55 percent.
With business travel seemingly starting the slow road to recovery, we’ve identified five trends that look set to define the future of business travel.
Risk Management Is Now a Critical Factor
Prior to the pandemic, around 5 percent of business travellers ranked health and safety as the most important factor when booking a trip. Understandably, that number skyrocketed during the pandemic, with 64 percent now ranking it as their number one priority, putting it level with price in importance.
In addition, 39 percent of business travellers have stated that they would have a number of concerns that would need to be clarified before they would feel comfortable travelling.
In light of these concerns, travel managers will have to transition their role to focus far more on risk management. The development of a new approach to business travel and the connected health and safety issues of travelling during the pandemic will now need to be a primary driver in how travel is arranged.
The two primary facets of this new paradigm will need to be a more personalized approach to business travel and the development of a new risk assessment policy.
Adopting a more personalized approach allows travel managers to fully understand both the individual needs and concerts of each staff member. Given the increased risk inherent with travel during a pandemic, travel managers should also take a more lenient approach to staff vetoing the idea of business travel or bending company policy to stay safe.
Developing a new risk assessment policy gives travel managers a more relevant framework to decide what constitutes essential travel, implement new policy compliance procedures, and create new guidelines for high-risk groups that need to travel.
Spend Management Will Become Even More Important
When it comes to paying for business travel, many companies now have two competing priorities. The first is the desire to resume a face-to-face business environment, in which business travel is vital.
Around 60 percent of businesses agree that the majority of deals and decisions cannot be made virtually while 76 percent agree that being there in person is vital to both HR and sales. However, given the challenging economic climate created by the pandemic, 62 percent of businesses have seen their travel budgets reduced or entirely cut.
Going forward, companies will have to balance these competing elements by carefully considering the value of business travel compared to the organization’s broader business goals.
Greater visibility over spend management through increased digitization and a greater focus on adherence to employee spending policies will be a major factor in the future of business travel as companies attempt to stay solvent.
Integrated Travel Management Solutions Will Be Critical
Despite the greater push for digitization and cloud-based solutions across many industries, travel planning and expense management remains an antiquated area. Around 60 percent of travel managers still rely on excel spreadsheets or pen and paper to track employee spending.
One of the major issues of business travel highlighted by the pandemic is the lack of support for fixing issues, such as cancellations and delays, that occur while travelling.
These issues are often caused, or exacerbated, but companies using multiple platforms and vendors for trip booking and handling in-trip customer service issues. Implementing end-to-end cloud-based business travel tools offer businesses the opportunity to combine all the disparate parts of their current business travel process onto one platform.
Streamlining this process allows companies the benefits of both greater visibility over their travel spending and the opportunity to provide a greater level of support for their staff while they are travelling.
Increased Leisure Travel Could Restart Business Travel
While tourism and business travel have always been treated as two separate facets of the travel and hospitality industry, there is one area where they are linked, customer confidence.
Since both leisure travellers and business travellers largely make use of the same travel and accommodation infrastructure, an increase in one could offset the concerns of the other.
Currently, only 14 percent of business travellers are completely confident about travel in the future. However, research by Southwest Airlines indicated that, once people had experienced their first flight after the outbreak of the pandemic, their comfort with the idea of further travel increased by 86 percent.
More leisure travellers returning to the air and becoming increasingly confident in the safety of their travel options could inform and reassure the concerns of business travelers.
Increased Remote Working Will Require More Business Travel
One of the more obvious changes to how we do business in the wake of the pandemic is the rapid increase in remote working. Measures put in place in response to social distancing guidelines look set to continue post-Covid with 82 percent of companies plan to allow employees to work remotely.
Ironically, this dispersion of teams may well lead to a greater emphasis on business travel. Certain types of jobs, such as HR and sales, are simply not well suited to the digital environment.
Around 83 percent of business travellers agree that, when it comes to getting
things done, meeting in person is more effective than meeting virtually. Since such teams are now likely to be more geographically distributed, business travel will become vital to facilitating any gathering of any size.
The Future of Business Travel
While the pandemic may have put business travel firmly on the back foot for the time being, it’s unlikely to have been a complete knockout blow. The face-to-face business environment is simply too firmly ingrained in corporate culture to be abandoned virtually overnight.
However, in order to adapt to a post-Covid world, business travellers, travel providers, and travel managers will need to completely reassess the value of travel and the mechanisms that support it.