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 all sectors of industry and politicians are eager to see continue as the COVID-19 pandemic continues to impact the global economy.
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. But, to what scale will it return? A new study supports the theory that it will bounce back, but warns that “a portion of business travel will never return”.
The ‘Flight Plan 2020: eight ways travel will be different a few months from now’ report has been published by IdeaWorksCompany, a consultancy specialising in ancillary revenue and loyalty marketing and is released in conjunction with mobility solutions supplier CarTrawler. It believes that travel is an essential element of being human and as such will return again. “These truths define the certainty of the travel industry’s recovery,” it says.
But, when it comes to the all important business travel, a foundation of the travel sector and an essential ingredient of any airline’s business model, that certainty comes with a caveat: adaption to new technology could change how we approach corporate meetings in the future.
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. After weeks, even months following social distancing guidance and restricted to our homes and gardens (for those that have them) most regular travellers will be eager to get back into the real world, replacing the virtual meetings and webinars that have dominated our time with real human-to-human contact. Well, to around a two metre distance, at least!
The report suggests that some business travel “will be replaced by technology because people have adapted to remote meetings”. It suggests a 5% to 10% long-term reduction, a figure that has also been cited by former Spirit Airlines CEO Ben Baldanza, who is now CEO of advisory firm Diemacher.
Mr Baldanza has said that between 5% and 15% of all pre-virus business traffic, is now at risk of not being justified by companies as travel spend in the future. “That’s because they will realise they can save this money and still get the same business done by using technology,” he has said.
While today the use of video and audio conferencing tools is a compromise to get things done while doing our part to not spread the coronavirus, it’s also teaching us that many things are quite effective this way. In the future does every board meeting need to be in person, or could one or two per year be done by video? Similarly, shorter meetings between a couple of people could easily be replaced by an online meeting, now we have proved the technology works.
Meanwhile, leisure and VFR travel “will rebound fully and with strength,” according to Mr Baldanza. As the IdeaWorksCompany report highlights: “Even the largest of screens can’t replace the sight, taste, and feel of a vacation destination. Technology is not a substitute for being there to visit parents, children, and friends.”
This viewpoint is one of eight observations the report makes in ‘Flight Plan 2020’ into how travel will be different a few months from now. It also highlights that capacity and inventory will decrease through business failures; closer to home will define leisure travel for the near term; health safety will become an ever-present factor; consumers will expect low prices, and low prices will stimulate traffic; government investment will have strings attached; change fees will be even more unpopular; and thankfully for many, that google will be distracted by other opportunities.