While domestic leisure travel has been jump-started as the pandemic continues to wane, business travel is slowly but surely starting to reemerge from its lengthy hiatus — welcome news for the travel sector.
On May 13, the Centers for Disease Control and Prevention announced that fully vaccinated people could forgo masks indoors and outdoors. While the announcement didn't mark the end of the health crisis, the pre-summer news invariably prompted people to feel more assured about traveling and ready to begin readjusting back toward normalcy.
That optimism is beginning to extend to the corporate world as businesses and corporations start returning to physical office spaces. While many companies have opted to implement hybrid work models, offices are still opening more generally, which portends a rise in business travel.
Richard Coughlan, an associate professor of management at the University of Richmond, said the reopening of offices and business travel would be "going hand in hand."
"Those travel arrangements are typically made because one company is going to visit another company in their office or at the plant. … They're certainly not going to visit their colleagues at home," Coughlan told the Washington Examiner.
"As more people return to the office, we ought to see the uptick in travel coming right behind it," he added.
Scott Kirby, CEO of United Airlines, recently discussed the return of business travel during an event. He said that while business travel is still down, there is a probable correlation between being in an office space and beginning to travel for work.
"Just like I am sitting here at home in Dallas and not in the office tower in Chicago, until people are back in the office tower, I don't think that really starts," he said at a virtual event. "And our best guess is, and certainly at United, it's going to be true, but I think by and large, by the time we get into the fall and kids are back in school, and so people have now had time to get their arrangements done and get their kids back in school, people will start to be back in office towers, and business demand will start to pick up."
Kirby said he has started traveling for business again and that once he was back on the road, he realized just how much he missed connecting with others on a more personal basis than through a computer screen. He pointed out that companies' budgets need to be considered when planning business travel and guessed that the actual "takeoff" in the industry might begin in January.
Some in the hotel industry are bullish on business travel's eventual return to normalcy. A spokesperson for Marriott International said that while business and group bookings are still down meaningfully compared to 2019, the numbers are improving every month.
"While trends will vary from region to region, we are optimistic about the recovery trajectory ahead," the spokesperson told the Washington Examiner. "We expect leisure demand to strengthen further into the summer, business transient and group to improve more slowly for now, and then business transient could accelerate in the fall as more businesses reopen."
Frank Passanante, senior vice president of Hilton Worldwide Sales — Americas, said that while domestic leisure travel has blossomed and has led the travel recovery in the waning days of the pandemic, he expects business trips will increase toward the back half of the year, "with corporate travel programs evolving and strengthening alongside the travel demand."
"Forward booking activity continues to improve month-over-month, suggesting customers are increasingly optimistic about safety measures and loosening pandemic restrictions — which is why it's important that we continue to work together to ensure that, when business travelers hit the road again, they have a positive experience all around," Passanante wrote in remarks to the Washington Examiner.
Data from TripActions, a corporate travel management company, bears the notion that business travel is beginning a return. The company said it has seen 10% week-over-week growth since the first full week of 2021 and has seen a 33% increase in bookings over the last four weeks as more people become vaccinated and the pandemic wanes. Additionally, since the start of the year, TripActions has averaged 31% month-over-month growth.
"We're seeing a new segment of business traveler emerge along with new hybrid work models and distributed teams: employees that may not have traveled previously but are gathering together for quarterly reviews, offsites, or creative, brainstorming sessions," Daniel Finkel, chief travel officer at TripActions, said in a statement to the Washington Examiner.
The pandemic has also caused shifts in exactly how business travel is carried out. There has been an "intentional travel" trend since the onset of the pandemic, according to TripActions, meaning that there has been a shift toward longer trips done with intention. While one-day trips are still popular and account for 32% of travel, trips that last up to a week have become the most-booked duration for business trips and make up 36% of TripActions bookings this summer.
Planning for trips has also changed. In January 2020, TripActions found that business travel was booked on average 12 days in advance, a number that shrunk to just one day at the height of the pandemic when people were uncertain about what was around the corner. That time has now risen back to eight days, another sign of increasing normalcy.
And while consultants and people traveling for meetings will likely increase by the end of the year, one form of business travel will probably take longer, according to Coughlan, the University of Richmond professor. Coughlan said big educational conferences will invariably take longer to return as it may be easier to do the teaching over Zoom. They also take a lot of planning.
"It's fairly difficult to throw together a major conference in anything less than several months," he said. "So we really won't see that impact, I think, until 2022 at the earliest. It's hard to fathom putting together a high-quality conference between now and the end of this calendar year."
He added that some of the more prominent conferences in large cities could take more than a year to plan and implement.
Regardless of how quickly business travel returns to pre-pandemic highs, the travel industry is likely feeling a bit of relief as businesses begin to return to their physical offices and, in turn, airports.
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Original Author: Zachary Halaschak
Original Location: Business travel starts to return, expected to increase in coming months