Post-COVID Battle For Business Travel Rages

Major airlines’ CEOs were cautiously optimistic a month ago that the COVID-ravaged travel industry was staging a slow recovery, and then markets and consumer confidence soared on reports that Pfizer and Moderna were finalizing COVID-19 vaccines. But then Bill Gates — the Microsoft co-founder turned global health philanthropist — predicted last week that business travel and office life as we once knew it will never be the same.

“My prediction would be that over 50 percent of business travel and over 30 percent of days in the office will go away,” Gates told a remote audience gathered at a New York Times event last week. He said the “gold standard” of flying to sit in front of clients was very hard to justify now when the same thing can be done virtually.

But Can It?

While only time (and countless other variables) will tell if and how the future of business travel plays out, Gates’ prediction has set off a very timely and intense debate in the industry.

Gates’ position was perhaps foreshadowed in early October, when Microsoft announced that the company would henceforth consider working from home half the time as the new standard for most of its 150,000 employees.

“We recognize that some employees are required to be onsite and some roles and businesses are better suited for working away from the worksite than others,” Microsoft said in a memo, but added that the company would “challenge long-held assumptions” and strive to be on the forefront of leveraging technology for remote working.

Of course, it’s also worth noting that Microsoft owns the telecommunication and video conferencing app Skype, which it acquired for $8.5 billion in 2011. Skype competes directly with Zoom, the popular video-conferencing platform.

But even in outlining its vision for the “new normal” of flexible workplaces, Microsoft was careful to quantify that the company’s views on work from home are still evolving.

“We are not committing to having every employee work from anywhere, as we believe there is value in employees being together in the workplace,” the company wrote in its memo. “We will continue to evolve our approach to flexibility over time as we learn more.”

Airlines Aren’t Throwing In The Towel

Air carriers aren’t giving up on the lucrative business-travel market just yet. For instance, United Airlines CEO Scott Kirby was unequivocal in releasing third-quarter results last month in stating his belief that the business travel model will be an essential long-term component of commerce.

“The first time someone loses a sale to a competitor who showed up in person is the last time they try to make a sales call on Zoom.” Kirby famously quipped on the company’s conference call in October.

Rival Delta Air Lines CEO Ed Bastion also recently offered a “this too shall pass” assessment of business travel’s ability to free itself from the pandemic.

Bastion said he’s “been in this business for a long time,” and that business travel’s death has been predicted during “every crisis that I’ve been part of — and it’s been a lot of crises over that 20-plus years.”

Bastion said the idea the technology will replace business travel “was the first thing that people always talked about. [But] every single time, business travel has come back stronger than anyone anticipated.”

Business Travel Will Be Different (But No One Knows How)

However, one thing almost everyone agrees on is that whatever the future holds for business travel, it won’t look and feel exactly as it used to pre-pandemic.

While a full recovery is said to still be years away, even airline CEOs acknowledge that business travel will be different when it comes back. In particular, business travel is apt to face closer back-office scrutiny on a cost/benefit analysis, given the massively different expenses involved in boarding a plane, staying in hotels and dining with clients vs. setting up a video conference.

There’s also the practical matter involved in first tamping down COVID-19’s current surge, which has seen 1 million new U.S. cases in the past week alone. And there will be logistical challenges involved in mass inoculations once the U.S. Food and Drug Administration greenlights a safe vaccine. Experts estimate vaccinating everyone could take a year.

Until then, just as Bill Gates and the company he founded have said, the world of business travel will have to remain flexible and learn as it goes.

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