The COVID-19 pandemic has crushed the business travel industry, shattering trade shows, hotels, airlines and other services. As video chatting became widespread, the loss of the industry was Zoom’s profit.
But now the restrictions are being lifted. As a result, business travel is returning.
Travel management company TripActions says business travel bookings are for the first quarter of this year exceeded all bookings for the entire previous year.
Not surprisingly, the “return” of business travel is actually less of a return and more like a new world of trends.
For example, TripActions says more than a third of business travelers already book longer leisure trips, combining business with leisure. Some business trips will be weekdays. Other trips will be remote workers visiting the office.
Despite the changes, some companies are still sending employees and managers on good old business trips.
A recent survey by the Global Business Travel Association (GBTA) found that three-quarters of respondents’ companies (74%) already allow international travel, up 48% in February.
The only difference is the price.
Supply, demand and inflation
Prices for all aspects of business travel are much higher than they were before the pandemic for three reasons:
- Sudden demand and limited supply.
- Companies are raising prices to make up for lost revenue.
Hertz CEO Stephen Cher told CNBC’s Jim Cramer last week that the resumption of business travel “could limit the already limited supply of rental cars … demand exceeds the amount of fleet the industry has,” he said.
(This is something I experienced personally when I rented two cars in Barcelona last week – one from Hertz, the other from Enterprise.)
Leisure travel will also affect business travelers.
As flights are filled with holiday travelers, these flights will be more limited than before, raising prices much higher than pre-pandemic levels.
Major US airlines say business travel has already recovered significantly, but do not expect a full recovery.
American Airlines CEO Robert Izom said during a recent call for profits, for example, that while travel demand is at 80% of 2019 levels, business trips for large corporate clients are only about 50% of the numbers before the pandemic.
Inflation is also hitting business travel. Food prices are rising. Fuel prices are higher. Almost everything is more expensive. And this affects corporate budgets.
The GBTA survey found that two out of five (41%) said they had increased staff travel costs for flights and 34% for hotel stays due to inflation.
And around the world, suppliers in the travel industry – from airlines to drivers to hotels to restaurants – who are mired in deep debt now have to charge more for their services to get out.
AirBnB charges significantly higher fees, for example.
More than half of what guests pay now does not go to the host, but is charged for cleaning, “service”, accommodation tax and other fees. For example, if the host receives $ 200 per night per room, the guest usually pays more than $ 425.
I noticed it myself this year; AirBnB rents are much more expensive than before.
Interestingly, 80% of travel managers said the pandemic had caused changes in the company’s travel policies. The majority said the changes included fewer business trips to be approved.
In short, travel managers and business leaders can expect employees to take fewer, more expensive, and longer trips that are more difficult to book, need to be tuned in earlier, and combine business with leisure or work time.
So make sure you and your staff justify the trip. Then take seriously the return on investment when traveling.
And be creative with how you combine the need to travel with employee satisfaction.
Copyright © 2022 IDG Communications, Inc.