Since the beginning of the global pandemic in March 2020, there have been statements everywhere that the world wouldn’t be the same when we emerged from this. Travel, specifically business travel, was an often-cited part of these predictions. Many thought that business travel would substantially decrease. Why would it be needed in a world where everyone had been doing video calls for over a year? The elimination of business travel would save a lot of money for many companies. However, at the same time, travel generates a lot of business from things like demonstrations, trade shows, and sales calls. So given these two competing concepts, can business travel make a comeback?
The Rise of Remote Work
It’s undeniable that remote work has increased during and after the pandemic. While this was an obvious necessity during the height of the pandemic for health and safety, it is here to stay in some form or another. Many companies are staying fully remote as the pandemic ends. Of those companies that don’t have full remote work policies, many have instituted optional remote work policies. These optional policies range from hybrid schedules (certain days in and out of the office) to added flexibility to do work remotely as the employee chooses. These policies are being implemented for primarily two reasons:
- It’s cheaper to have remote workers than a central office.
- Many prefer the flexibility of remote work so offering it is a recruiting and retention perk.
According to the LinkedIn Workforce Report released at the end of 2021, 12% of job postings were for remote work. For comparison, only 1.3% of job postings were for remote work prior to the pandemic. This is almost a 10x growth in remote work within a year. While the majority of people may think that these changes are limited to tech companies, that isn’t the case. It’s true that software and IT jobs saw a 17.5% increase in remote work or work-from-home arrangements. However, many other sectors also saw sizable increases. According to the same LinkedIn Report, healthcare saw an 11.2% increase and wellness/fitness saw a 17.9% increase. The only sectors that weren’t seeing sizable increases were industries such as education, manufacturing, and retail. These are held in central locations for obvious reasons. We will likely see this trend continue in the coming years.
Succeeding Without Business Travel
Business travel took a plunge during the pandemic and has been slow to recover as the world emerges from lockdowns. The reasons for this are both varied and understandable. The vast majority of business travel is to attend conferences, trades shows, and sales calls. With most offices closed and conferences canceled or switched to virtual, there was no need for business travel. While the world is still emerging, it is starting to cautiously bring back live events. Many conferences and trade shows are coming back in both in-person and virtual options.
However, as many businesses have succeeded over the past two years, they are re-evaluating the need for travel. Many businesses have seen the cost savings from a reduction in business travel. Reductions in business travel also mean more productive time in the office for employees. This mentality is likely to be a headwind against returning to the previous norms for travel. According to a recent survey of corporate travel managers by Deloitte, company travel for internal purposes is likely to remain low in the future. The pandemic experience has shown many corporate managers that team meetings, leadership training, and content-heavy meetings can easily be conducted via tech platforms like Microsoft Teams.
Saving the Increasing Cost of Business Travel
While not a direct result of the pandemic, there are a couple of other factors that are likely to hold companies back from returning to pre-pandemic norms. The first is budgets. While eliminating travel is a cost reduction as examined above, it is also true that performing the same amount of travel as prior to the pandemic would be more expensive for companies now. Between a reduction in the travel industry capacity and inflation, prices have increased. In an inflationary environment where supply chain issues continue to cause headaches, businesses will look for opportunities to save a few percentage points on their overall costs. Travel could be one of the first places that business would look.
Business Travel vs. Sustainability Initiatives
Second, many companies have implemented sustainability initiatives recently. Business travel is a large contributor to the overall environmental impact for many companies. Therefore, it is likely to be a target for decrease in the coming years. In the same survey of corporate travel managers by Deloitte, 76% of managers stated that their company will transition more internal meetings to an online format. 58% of managers also stated that they intend to restrict the frequency of business travel in the future.
All of the above have the effect of decreasing travel demand from corporate sources in the coming years. While this would seem to confirm some of the popular wisdom about business travel, I don’t believe it is all doom and gloom.
Predictions of Future Business Travel
With the rise in remote work and businesses increasingly using tech platforms for internal meetings, it seems like the future of business travel is unlikely to return to 2019 levels. However, I think this is somewhat of a simplistic view.
The Rise or Death of Traditional Business Travel Categories
First, there are some types of travel that are a necessity for business. These events are considered essential and are dependent on in-person interactions. This includes on-site visits, sales calls, client relationship building, networking events, and collaborative client projects. All of these events require travel and won’t be replaced by a Microsoft Teams meeting any time soon. 2022 and future years should see business travel increase for these categories as more clients open up their spaces to visitors and networking events return.
Second, identifying the types of travel that are necessary for business clearly indicates there are some types of travel that aren’t necessary. As previously mentioned, internal training and internal team meeting travel are likely to struggle in the coming years. Tech platforms have proved an effective method of conducting these activities over the past couple of years. With the rise in remote work, there are also fewer people in offices to visit. These will combine to reduce the business travel of those who frequently conduct this type of activity.
New Business Travel Categories
As the saying goes, as one door closes another opens. That saying is likely to hold true in the new age of business travel. The new era of remote workers and fragmented companies is likely to spur new types of travel. Ovation Travel and American Express recently wrote a white paper on the use of travel to develop company culture. While both of these companies have an interest in travel returning to previous levels, I find many of the points raised in the paper convincing. I want to examine some of the most intriguing new travel categories below.
Remote Work Lacks a Company Culture
A problem that has already emerged and will continue to emerge with remote workers is the absence of a cohesive company cultures. There are a number of reasons that off-site meetings and team retreats are popular even with tech companies. In-person interaction is necessary to develop relationships between employees. Different environments are also important to spark innovation and drive employee engagement. While the regular internal meeting and training travel will undoubtedly decrease, the special company culture and relationship-building travel will see a rise.
Work-Life Balance Meets Travel
Burnout has long been a concern of many companies. Unfortunately, burnout has accelerated in recent years leading to what many have termed the “great resignation.” While much of this is pandemic related, a certain amount is related to work stress levels and overall employee well-being. Turnover is a big expense for any business, so there are major incentives for companies to use new methods to retain talent. Some ideas that are gaining traction in the employee well-being space include personal travel allowances, company shutdowns for “wellness weeks”, synchronous time off, incentivizing time off and travel. While these aren’t specifically business travel, they would have the impact of increasing overall travel demand while businesses foot the bill.
Bottom Line
While we have definitely seen a decrease in business travel over the past two years, it is improving. There are some types of business travel (the internal meeting, training, and content-focused conferences) that will likely never make a comeback. Other forms of business travel such as relationship building, client interaction, and on-site collaboration are likely to return to their prior levels. The pandemic labor market and the rise of remote work will also promote the development of a whole new type of business travel. All this together will result in the return of business travel, it just may not be the business travel environment we were used to from before.
