While the recreational travel segment is seeing recovery as vaccines go out and consumers become more comfortable flying the friendly skies again, the return of business travel is far less certain. American Airlines, for example, will fly 90 percent of its summer seat capacity by increasing short-haul international capacity to 120 percent, according to Wall Street Journal reports — but long-haul business travel will remain at 40 percent of the 2019 number.
And America is not alien in its cautious predictions for business travel recovery. Delta’s CEO has projected that business travel will be back to 70 percent of its pre-pandemic level by 2023. It might take far longer to recoup that other 30 percent, he noted, now that the definition of “necessary travel” has changed. Analysts, given the rather lopsided recovery, expect unit passenger revenues to stay below pre-pandemic levels well beyond 2023.
The market, it seems, is changing. Some of that change is technological, as products like Zoom, Google Meet, Slack and Skype make it easier for colleagues to meet in person virtually, reducing the need for face-to-face contact between colleagues. And according to Financial Times reports, professionals — particularly in the financial services sector — are increasingly willing to leverage those digital travel portals in lieu of getting on a plane and traveling vast distances.
Business travel won’t disappear entirely, Andy Halford, chief financial officer of Standard Chartered, told the FT — but it won’t have to be nearly as prevalent as it was before the pandemic. “Meetings with investors to do updates, roadshows around the world, I expect those things will reduce. Many investors can get just as much out of it on video. But town halls with a lot of staff, important executive meetings … that will need to continue. The morale impact is worth the effort,” he said.
Several of the bankers that FT spoke to further opined that a good deal of travel, once seen as necessary to doing business, will now be considered superfluous and better carried out via digital channels. And those channels continue to improve as telework becomes a more common phenomenon. The teleconferencing phenomenon Zoom has recently announced the launch of a teleworking feature called Immersive View, which allows hosts to arrange video participants and webinar panelists into a single virtual background, bringing people together into one scene to connect and collaborate in a cohesive virtual meeting space.
It seems the T&E space will have to battle back through recovery, facing new competition from teleworking platforms that are getting better at virtualizing the experience — and as corporate treasurers are seeing a potential path to permanently reducing their travel budgets. Last week, for example, T&E platform TripActions announced a collaboration with Visa to support the expansion of “digital-first payment solutions for business travel.” The partnership will bring together Visa’s offerings and TripActions’ infrastructure to support expense management for TripActions’ large business clients throughout the U.S., and will also offer new tools to process payments. Much of the business travel market misses being out there, TripActions Liquid General Manager Michael Sindicich said in a conversation with Karen Webster and Visa Senior Vice President and Global Head of FinTech Terry Angelos, but they are looking for an improved experience across the board before they dive back in. “I think a lot of folks miss travel, but nobody misses doing expenses, right?” Angelos noted.
And, Ingo Money CEO Drew Edwards affirmed, workers really do miss traveling. Everything may not come back, like massive conferences with thousands of strangers meeting and shaking hands, he noted, but some business really is done better face to face. “I still believe people want to get out, but I might not go to a 20,000-person conference as willingly as I once did,” he explained. “But I don’t think the days of going to New York and having dinner with six people in a private dining room are dead forever.”
Not dead forever, but perhaps slower to recover than airlines and hotels might prefer. Because at one time, there was no replacement for actually being there — but the digital world is doing an increasingly good job of building quite a few possible replacements.
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