A survey by the American Hotel and Lodging Association (AHLA) shows that business travel has plunged over the last year, with 67% of respondents saying they expect to travel much less than they did before the pandemic, 52% planning to cancel trips already on their agenda with no idea of resuming them, and 60% making temporary cancellations due to the health situation.
Faced with a disastrous 2020, travel-related industries, from airlines to hotels, the slight rise this year should be seen within a general downward trend in precisely the category that generates the most revenue, business trips.
For airlines, business travel accounts for only 12% of tickets but around 75% of profits. In the case of hotels, we are talking about more than half of their overall turnover, depending on destinations and categories. The survey concludes that the levels considered normal before the pandemic will not be recovered until 2024, but the reality is that, as much as the industry holds out hope of returning to those levels, it is quite possible that many of the people who used to travel regularly for business will, after seeing the impact on their sector and their quality of life, change their habits, while companies will be less willing to pay for such trips.
Many of these trips, moreover, were related to events and conferences, many of which have been drastically cut back, and are not only part of an economic category in themselves, but also, in many cases, of the income of numerous specialized hotel companies. According to Deloitte, corporate travel will remain at only 30% of what it was at 2019 levels for the remainder of 2021.
How many of the activities that were usually carried out as part of business travel are destined to disappear? Many of the trips that were intended for meetings with executives of the same company abroad are undoubtedly being conducted via videoconferencing, although many companies tend to think that some on-site supervision is essential. When it comes to meetings with other companies, the rules may change and, in general, they are still waiting for the quality of videoconference apps to improve.
The last year has also seen a sharp drop in corporate events, as conferences were cancelled due to the pandemic, and with many executives saying that face-to-face meetings and networking are essential, which could mean that things pick up as the situation returns to normal. But given the tendency of habits to become entrenched over over time, and the usual way of calculating corporate budgets, which have been reduced by up to 90%, I suspect we might be talking about a fundamental change in the way we have worked for a long time, with all that this may entail for business people and their industries.
This post was previously published on Medium.com.
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