The COVID-19 epidemic has hit the business travel industry, hitting trade shows, hotels, airlines and other services. As video meetings moved into the mainstream, the loss of the industry was a gain for Zoom.
But now the ban is being lifted. As a result business travel is coming back.
Travel management company TripActions said business travel bookings in the first quarter of this year surpassed all bookings of the previous year.
Surprisingly, the “return” of business travel is, in fact, less of a return and more of a new world of trends.
TripActions, for example, says more than a third of business travelers are now booking long “leisure” trips, combining business with leisure. Some business travel will be workplace. Other trip office inspections will be remote staff.
Despite the change, some companies are still sending employees and executives on good old-fashioned business trips.
A recent Global Business Travel Association (GBTA) survey found that three-quarters of respondents to companies (74%) now allow international travel, up from 48% in February.
The only difference is the price.
Supply, demand and inflation
The price for all aspects of business travel is much higher than before the epidemic for three reasons:
- Sudden demand and limited supply.
- Inflation.
- Companies raise prices to cover lost revenue.
Hertz CEO Stephen Sherr told CNBC’s Jim Kramer last week that the recovery of the business trip “could hamper the already tight supply of rental cars …, the demand exceeds the size of the industry fleet,” he said.
(I felt it myself when I rented two cars in Barcelona last week – one from Hertz, the other from Enterprise.)
Leisure travel will also affect business travelers.
As the flights are filled with holiday passengers, those flights will be more limited than before, raising prices much higher than at pre-epidemic levels.
Major US airlines say business travel has already recovered enough, but they do not expect a full recovery.
Robert Ism, CEO of American Airlines, said during a recent earnings call, for example, that while travel demand is at 80% of the 2019 level, business travel for large corporate clients is only about 50% of the pre-epidemic number.
Inflation is also hitting business travel. Food prices have risen. Fuel prices are high. Almost everything costs more. And it is affecting the corporate budget.
The GBTA survey found that two out of five (41%) said they had increased staff travel expenses for flights and hotel stays by 34% due to inflation.
And around the world, travel industry providers – from airlines to drivers to hotels to restaurants – who have gone into deep debt are now charging more for their services.
For example, AirBnB is charging much higher fees.
Guests now do not go to the host for more than half of what they offer but are charged for clean, “service”, occupancy tax and other fees. So, for example, if the host gets $ 200 per night for a room, the guest will usually pay more than $ 425.
I noticed it myself this year; AirBnB fares are much more expensive than before.
Interestingly, 80% of travel managers say the epidemic has prompted a change in the company’s travel policy. The majority said the changes would allow fewer business trips.
In short, travel managers and business leaders can expect employees to take shorter, more expensive and longer trips that are more difficult to book, set up more early and combine business with leisure or workplace time.
So make sure you and your staff are justifying the trip. Then, get serious about travel ROI.
And you get creative with how you combine travel needs with employee satisfaction.
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