The pandemic led to the shutdown of many industries, and one of the industries that was most devastated was the travel industry, particularly air travel. The business travel outlook in 2020 and 2021 was dismal due to Covid travel restrictions. However, most restrictions are being lifted, allowing for business travel, leading many to think about the present and future. Heading into the fall of 2022, what will business travel look like? Let us find out.
The Rebound of Business Travel
The business travel outlook continues to move in a positive direction as more professionals are will be free to travel as long as they meet the relevant requirements. Airplanes still have business class and are vigorously promoting it to try and encourage business travel. However, the world is vastly different from it was before the pandemic. Many businesses rely on business travelers to increase profitability, such as hotels, limo services, restaurants, e.t.c.
The most significant change has been that teleconferencing technology has dramatically improved and been adopted by many companies. Though research shows face-to-face meetings are more productive and interactive, many companies will continue teleconferencing instead of traveling because of the cost advantages. According to Accor’s Sophie Hilgard, the Northern Europe senior vice president of sales, we should expect 20% fewer business trips this year, 2022, than in 2019.
Is Business Travel Increasing?
The business travel outlook does not paint a pretty picture for the airline industry. Many companies are spending a lot of time, effort, and money to convince employees to return to traveling. This is challenging because many have become accustomed to working from home and only traveling when necessary.
According to CNBC, global business travel spending fell 54% to $661 billion in 2020 from $1.4 trillion in 2019. They also state that the business air travel industry may surpass $1 trillion in 2022, about seventy percent of pre-pandemic levels. China and the United States are expected to lead the increase in global business air travel. As far as domestic business travel is concerned, some cities and states like San Francisco and New York were hit harder by the pandemic than others, so the recovery rate will vary.
The good news is that business travel is back and business travel from Jan to May of 2022 increased 900% from the previous year. However, because of the pandemic, business travel has changed forever, and new forms of business travel are happening. For example, despite fewer people traveling to business conferences and in-person meetings, there is more business travel for offsite team meetings and events. Moreover, the number of travelers per company has also increased.
How Business Travel Is Changing
Like many other industries, there have been changes to the business air travel industry. For example, some airlines are offering more reward points or miles for business travel to entice flyers. Business travelers can hence redeem the miles for leisure travel. Therefore, even though there is less business travel, those that travel can gain significant benefits.
Another change in the industry is that due to less competition, there are currently more deals available for travelers than before. Leisure travelers have primarily taken deals opportunities, but business travelers who started traveling early have also enjoyed great benefits.
According to basic laws of economics, the lower the demand, the higher the price, which is precisely what has happened to the business air travel industry. Business travel comprises about half of the airline industry’s revenue, so the lack of business travel meant leisure travel prices had to increase for airlines to bridge the shortfall.
Airlines have also become less forceful and stringent in upholding their policies to attract more passengers. Because there is so little demand for business travel, airlines are less likely to be strict with various policies, which travelers can take advantage of in the fall of 2022. Security and other policies will still be in play as well as the additional Covid policies, but overall, it is much easier to travel now than ever.
A significant shift in air travel has occurred due to the climate crisis, as companies need to justify their carbon footprint. Therefore, business travel priorities have undergone significant change, and ‘mindful travel’ is now a buzzword you will hear many companies use.
Business air travel is slowly returning, albeit at a slow pace, due to the above reasons. Business air travel will never be the same, and many experts predict that about twenty percent of it is gone forever. The above article outlines the outlook for the business air travel industry going into the fall of 2022. Businesses will have to justify air travel, domestic and international, both financially and ecologically, in 2022.
Related article: The Rise of Bleisure Travel and Remote Work.