Just as cashflow is the lifeblood of any business, corporate travel is the foundation of the travel and tourism sector. It will always remain a vital component supporting the health of airlines, airports, hotels, even restaurants, while also supporting the economic development of destinations. History shows that it is a resilient sector and despite regular punches from health and economic crisis, to terrorist attacks and natural disasters, it always manages to get back on its feet.
Corporate travel and economic recovery go hand in hand. To get global business moving again corporate travellers generally have to fly. We have seen that in the past. Right now it is a phenomenon that business leaders across the entire travel and tourism sector are eager to see continue as the COVID-19 outbreak infects the industry.
The numbers now being shouted about by industry bodies as the cost of the pandemic are on the rise. International Air Transport Association’s (IATA) revised revenue impact from COVID-19 now puts the cost of lost business at USD252 billion or 44% below 2019’s figure. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year.
The World Travel & Tourism Council (WTTC) says up to 75 million jobs are at immediate risk across the world due to the coronavirus pandemic. The alarming figure, based on research from WTTC, shows a punishing Travel & Tourism GDP loss to the world economy of up to USD2.1 trillion in 2020.
The organisation’s president & CEO, Gloria Guevara, says the sector is on the verge of “an economic meltdown from which it will struggle to recover”. Not only will this have an enormous negative impact on major businesses in the sector around the world, the ‘domino effect’ will also result in massive job losses across the entire supply chain.
So what about those corporate travellers? Just like the key workers that are currently working to blunt the pandemic’s power, corporate travellers could be among the key workers that support the post-COVID-19 economic recovery.
Right now the virus is having a destructive effect on the global business travel industry, more than any previous event, but still the corporate travel industry remains optimistic. It seems to support the IATA viewpoint of three months of tough travel restrictions, followed by a recovery during the second half of the year. China does appear to be emerging from the ashes, Japan or South Korea will be among the next, in all probability.
But the travel industry post-COVID-19 will not be the same as we experienced before. This event is a key milestone moment for the sector. It may (hopefully!) be just a matter of months, but regardless of the length times have changed forever.
It is impossible to predict just how that new landscape will look. You can make some well-informed guesses over the brands that will survive thanks to their strong liquidity or government support. It is certain that businesses will be much smarter at budgeting travel costs and related expenditure. In the short-term, at least, the implementation of stricter controls on travel policies will be a given.
Business travel will bounce back, but there is a doubt it could return to levels seen prior to the pandemic. Last year, before the virus had made its leap from animal to human, there was increasing talk about how new sustainability strategies at some the biggest corporate companies could directly impact travel.
We are already seeing stories about how air quality has improved across parts of China and northern Italy as governments have locked-down citizens to ease the spread of the coronavirus. The waters in the Venice canals have even cleared that fish have been spotted swimming in what were previously murky waters.
The environmental agenda will still be as strong as we awake post-COVID-19 and that will introduce an added pressure that was not seen in the recovery from previous milestone events. It will not be enough to stop the return of corporate travel, but it will certainly have an impact.
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The impact on airlines of the recent COVID-19 coronavirus outbreak, which began in China but has spread around the world, continues to have a devastating effect on the aviation and supporting industries. In a new essential daily update, CAPA – Centre for Aviation is curating intelligence from the World Health Organisation (WHO) and myriad industry sources available via its CAPA Membership news and data service. Its mission is to help cut through the noise and provide a useful daily snapshot of the COVID-19 outbreak evolution, together with key industry developments.