CareCredit - Women's Health April 2024

Businesses Reconsider Travel Amid Cost-Cutting and Environmental Concerns

Business travel has changed for thousands of workers, thanks to COVID, cost-cutting and environmental worries.

That’s according to a Sunday (Feb. 25) Financial Times (FT) report, which says some big companies in the U.S. and Europe have stopped allowing nonessential trips, while many business travelers are taking longer trips to reduce the need for repeat visits.

“You have to have a real story behind the trip to have it approved now,” one London-based banker told the FT. Another said that senior staff are traveling nearly as regularly as before the pandemic, while junior employees have seen trips cut back.

Elsewhere, companies are changing the way they travel, often with an environmentally conscious goal in mind, the report said.

For example, the American pharmaceutical company Parexel has a travel policy that encourages staff to go by train instead of by air when possible. In Germany, where the firm has more than 750 employees, 96% of domestic trips are now taken by train.

Still, the report notes that business travel isn’t dead, with global bookings coming to 70% of 2019 levels in October 2023, compared to 63% in April, according to survey data by the Global Business Travel Association.

Lawyers and bankers still hit the road to close deals, sales reps still value face-to-face meetings, and many industries cannot function without moving large numbers of workers.

Last month, United Airlines said that it was looking to the return of business travel to provide an industry-wide tailwind.

“Domestic demand remains strong with increases in business traffic volumes year over year,” said United Airlines Chief Commercial Officer Andrew Nocella, adding that the airline is “particularly bullish about what Asia looks like going forward.”

“We’ve all sat on calls and predicted the recovery of business traffic more times than I can count over the last few years,” he said. “And I will say Q4 was OK. It wasn’t spectacular in any way. But as we started January in the new budget season, for all of our big corporate clients, we did notice a significant step up.”

Delta CEO Ed Bastian noted a similar corporate travel recovery during that airline’s earnings call in January.

“We are seeing continued improvement in the corporate sector,” Bastian said. “We had a number of laggards, tech being the largest, and we’re finally starting to see tech companies traveling again as a result of return to office, the consultancies as well. We are seeing it across the board. The auto and entertainment sectors have rebounded nicely following the strikes in the fourth quarter.”