While leisure travel is on the upswing this summer, business travel is giving way to Zoom meetings over zooming jets as flight disruptions and soaring costs find corporates taking a hard look at travel expenses, leaving many wondering if the practice will ever return to prior levels.
In its “Business Travel Tracker – 2022 Q2” survey taken in May, the U.S. Travel Association (USTA) found that “more than two-thirds of corporate executives expect the company they work for will spend less on business travel over the next six months compared to the same period in 2019. This is true across all trip purposes.”
About a fifth of business travelers surveyed said they were unsure when they’d make a trip for a meeting or trade show in the next six months. The most frequently cited reasons included the rise in videoconferencing, international travel constrictions, cost and other constraints.
In a separate blog post, the USTA said, “Despite agreement that reducing business travel will be harmful to long-term sales, more than two-thirds of executives expect their company will spend less on business travel over the next six months compared to the same period in 2019. Further, half of companies still have policies in place restricting business travel.”
This comes as major airlines prepare to release quarterly earnings that are expected to be much improved over recent quarters, based on the pent-up leisure travel demand that has slimmed down flight schedules packed with holidaymakers, but not so much business travelers.
Ironically, much of the research being conducted focuses on those who are back to traveling for business and not happy about it. According to the 2022 SAP Concur Global Business Travel Survey of business travelers and managers, “It’s clear that business travel will not be available for all employees as 83% agree that their company seems to have adopted a ‘more travel on fewer shoulders’ approach, returning to pre-pandemic levels of travel,” but only for key staff.
The situation is concerning to travel managers, with the SAP Concur survey stating that 100% of travel managers “expect their role to be more challenging in the next 12 months compared to last year, with nearly half (49%) reporting that the stress is coming from above, through increasing pressure from senior leadership to demonstrate the ROI of their role.”
Although the outlook is somewhat grim for corporate road warriors, there are some encouraging trends in corporate travel showing that business still values in-person meetings.
The Las Vegas Convention and Visitors Bureau (LVCVB) reported in May that trade show and conference activity was up a staggering 878%, comparing the first half of 2022 to last year.
LVCVA board member and Clark County Commission Chair Jim Gibson told FOX News Las Vegas, “All the shows are still back and are back in town. We’ve signed more specialty shows than ever before. We continue to sign new shows every day. We predicted probably 2024 before we were fully back. I think that one could make the argument that may happen earlier.”
While U.S. magnet cities like Chicago, Las Vegas, New York and San Francisco will likely see a larger share of business travel due to their convention infrastructure, the cutbacks now are more about costs than COVID-19 as companies now see travel as a nice-to-have, not a necessity.
For their part, business travelers appear ready to get back on the circuit. According to a March study conducted for the American Hotel & Lodging Association (AHLA), “Nearly two-thirds of business travelers say the increased reliance on virtual work that has become common during the pandemic is negatively impacting both productivity (64%) and workplace culture (65%).”
Additionally, that survey found that “80% of employed Americans and 86% of business travelers say face-to-face interactions are important for maximizing company success.”