The limitations of virtual meetings and the rise of new companies trading globally bode well for a revival in business travel, says Richard Tams.
As someone who has only recently taken to the skies again for the purpose of business travel after a grounding of 18 months, I have to ask the question: will business travel ever be the same again? While suppliers in the industry hope for the return of passenger volumes, I have to say that I think the nature of business travel has changed for good.
When I was head of corporate sales for a major airline, our clients would occasionally issue revised travel policies in times of financial hardship or, more frequently, as they approached the end of their financial year. The new edict would be that only ‘essential travel’ would be permitted. Not only was this bad news for their travel suppliers, but it always made those of us in the industry wonder what ‘non-essential’ travel looked like and why it was permitted for the rest of the time.
We didn’t ask too many questions of course because corporate travel spend was key to our business model. However, it does beg the question as to whether this ‘non-essential’ business travel can be relied upon to keep the sector afloat in the future and, if not, what should suppliers do?
WHAT IS ‘NON-ESSENTIAL’?
How can we define what companies mean by ‘non-essential’ business travel?
From my own experience of 20 years in business travel, the term has broadly come to define all travel that is not client-facing, and therefore does not directly generate revenue flows into the company, or is not essential for corporate compliance. By this definition, all travel to visit overseas offices, to attend internal meetings or external conferences or to meet with suppliers would be included in the ban.
I’m not suggesting for a minute that companies will take such a draconian view of business travel on a permanent basis in the future. In fact, as we come out of the pandemic, we are all discovering the shortcomings of virtual meetings when it comes to building teams, passing on skills and sharing best practice with peers.
However, as financial controllers and sustainability chiefs look to 2022, the option of Zoom as an alternative to many meetings that we have previously flown around the globe to attend, will be increasingly compelling. Unlike previous travel bans which may have lasted a few months, we have had at least 18 months to master these mediums. In that context, the idea of once again hopping on a plane as if it were a bus to attend a quarterly review or a client dinner in New York, with all the accompanying paperwork and wellbeing implications, may appear laughable.
For those that can justify the expense and the emissions, there will be increasing pressure to plan and consolidate their travel in better ways, meaning that trips will be booked further out and will be fewer but longer. This has varied implications for the business travel supply chain and the wellbeing of travellers. Suppliers will need to look again at advanced purchase airfare products, the frequency and capacity of business flights, and the nature of longer stay hotel offerings, to name but a few.
There will also be a resulting wellbeing dividend as we pivot towards less brutal travel itineraries. This will coincidentally suit a new generation of corporate nomads, for whom the distinction between work and leisure trips will become increasingly blurred in the future.
REASONS TO BE CHEERFUL
Industry leaders have generally forecast that business travel volumes will reach pre-pandemic levels by 2023 and I don’t for a moment think that their optimism is misplaced. The question is whether those levels are reached by a return to old habits by current business travellers or organic growth stemming from burgeoning new businesses keen to trade globally.
I predict the latter, with the traditionally big spenders in the market travelling less, and new entrants taking up the slack. The industry should not be downhearted. It’s not dying, it’s just changing.
Richard Tams is an airline consultant and executive coach