In a typical year, business travel is the hotel industry’s largest revenue provider. Now, corporate travel post COVID-19 has changed.
In 2021, the Global Business Travel Association’s (GBTA) BTI Outlook expects spending on business travel to grow 21%. However, business travel veterans and experts say that it would be 19% to 36% less than in the pre-pandemic era, even when the rest of the economy rebounds.
A Deloitte study corroborates these findings. In 2020, corporate travel declined by 90%, and though it has begun again, it’s not quite at the same scale. As of the second quarter of 2021, less than 1 in 5 companies had reached even 25% of their 2019 quarterly spend.
Today, there are new, stricter requirements in terms of security and, more recently, hygiene. To ensure safe and protected movement, corporate travelers have to:
- Take rapid and antigen tests regularly
- Quarantine on arrival regardless of vaccination status
- Endure long queues and wait times
- Plan ahead due to limited airline seat and car rental supplies
All these frictions pose significant challenges in corporate travel today.
Challenges of Corporate Travel Post COVID-19
Amid fluctuating rates of COVID-19, 67% of business travelers are taking fewer trips than planned. 52% say they’re likely to cancel existing travel plans with no intent to reschedule.
But corporate travel is slowly returning to some parts of the world, owing to reduced cases and a return to a more normal way of doing things.
In a poll of 40 CFOs across North America, Latin America, Asia-Pacific and Europe, 70 percent said they feel the overall economy in their country would be better in 2022 than it has been in 2021. Encouragingly, about half (52 percent) believe their company’s travel spend would reach 2019 levels in 2022.
Suzanne Neufang, CEO of the GBTA, said: “Of any year we’ve issued the BTI Outlook forecast, this one was the most anticipated, and it’s no surprise. The business travel industry recognizes there are factors, related to Covid-19 and beyond, that could impact the road ahead over the coming years. However, there is optimism overall as the industry, companies and travelers worldwide lean into recovery and the much-needed return to business travel.”
But the “new normal” isn’t without new complexities and challenges, including:
More complex travel
There are more hurdles post-pandemic, such as scheduling COVID PCR tests within the window of time required by the host nation.
Travelers must receive their results before embarkation and meet the destination country’s requirements; otherwise, they could scuttle the trip.
With travel restrictions around the globe travelers have to pay higher fares on many routes, in addition to spending money on hotels, meals, and other necessities. Some routes have fewer flights, which not only means higher cost, but also crowded flights. And there is less room for error. Say a traveler is late and misses a flight — hopping on the next one might not be an option.
Additionally, as travelers crisscross between destinations with ever-changing restrictions, they’re more likely to get stuck in a location they didn’t plan or want to be, and for a significant period. Laws and regulations change from country to country. If someone has the wrong type of COVID test for example, they may not be permitted to board. Not all vaccinations are accepted worldwide, either.
Lack of rental cars
The global semiconductor shortage has wreaked havoc on car rentals. As rental companies retired their fleets, there were no new vehicles to replace them with. And the shortages don’t look to be going away any time soon.
No reasonable refund and credit policies
Business travelers whose flights were canceled due to the pandemic are starting to pull up their credit or voucher-related emails and read the fine print. Many are discovering they won’t get to use their credits before they expire, or some vouchers have restrictions that make them hard to use.
Throughout the pandemic many airlines slashed staff. The result is longer wait times to get refund help, sometimes to no avail.
So, how should companies deal with all the above issues? Here are some key innovations that companies have designed as workarounds.
Company-wide rapid test policies
Rapid testing helps organizations stay ahead of abrupt cancellations. Rapid tests have been helpful in identifying COVID while flights are still within their cancellation time periods. Additionally, it helps employees avoid forced isolation in a hotel in a different city. Having a rapid test policy helps companies avoid office-wide outbreaks as well.
Longer and Less business trips
In 2019 Salesforce alone was responsible for 146,000 metric tons of CO2, the same amount as nearly 20,000 homes. In 2020 that was dramatically reduced to 20,000 metric tons.
As businesses are starting to resume some travel, organizations are opting for longer trips, less often. They days of flying for a single meeting are likely behind us, as companies are being forced to account for Scope 3 emissions. Instead, many businesses are opting for extended trips with more days, avoiding layovers and single-day meetings, picking hotels with outdoor areas to meet and have outside coffees.
The pandemic has forced travelers to consider new ways of working. Employees may be turning to a hybrid approach – some in person meetings that require travel paired with virtual conferencing for other meetings.
End-to-end travel software
It’s not enough just to choose the right airline. The journey starts long before the boarding gate and ends well after you claim your baggage.
End users want to search for travel options and book trips themselves. And they want to access that information in real time, all in one place.
Software solutions like Deem that cover end-to-end travel place the experience in the traveler’s hands, giving them control and confidence to travel again.
Ready to get back to corporate travel? Learn how Deem’s end-to-end travel solution can help travelers stay in compliance and save money while keeping employees happier when they travel.