Don’t expect business travel to bounce back this year— but don’t count it out altogether
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Susan Lichtenstein was attending an industry event, aptly named the Business Travel Show, in London at the end of February. By the last day of the conference, the novel coronavirus that had emerged from Wuhan, China, in late December had become the main point of conversation. By the time she reached Heathrow Airport to head home to Palm Beach, Fla., social distancing—before it entered the international lexicon—was already in action as she describes a scene of frenzied travelers concerned about keeping their distance from others.
“Once on the plane, I was one of many passengers who wiped everything down with disinfectant wipes and did not move around the cabin even though it was a 10-hour flight,” she recalls. “It was on that flight that I knew travel was going to come to a complete standstill.”
The COVID-19 global pandemic has placed a stranglehold on all facets of the global economy, and its impact will change the way businesses manage corporate travel. In 2019, global business tourism spending reached $1.28 billion, after climbing consistently for the past five years, according to Statista. In early February, the outlook had expected that figure to grow to $1.37 billion in 2020, but that certainly won’t be the case now as all nonessential travel has come to a sudden halt.
It will take a long time for travel to fully recover to 2019 levels: If not due to COVID-19 mitigation, it will be due to the economic downturn. “There will be recovery, but the last seven years or so have been fantastic for the travel industry, and this will be our point of comparison,” says Andrea Stokes, hospitality practice lead at J.D. Power.
Lichtenstein, managing partner of DigiTravel Consulting, a boutique firm in corporate travel and expenses management, expects it will take between two to three years for travel to come back to 2019 levels.
“It will be a prolonged process,” she says. “Companies are all in the process of changing their strategies to address their top priorities to drive revenue. Those priorities will fuel the growth of travel budgets for the next few years.”
Most experts agree that it will take a widely available vaccine for COVID-19 to restore consumer and business travel confidence, but that could take anywhere from 12 to 18 months. In the meantime, Dan Richards, CEO of Global Rescue, which provides medical, evacuation, travel risk, and crisis management services, suggests there are three things all travel entities can do to reduce the spread and severity of the disease while instilling customer confidence: communicate which steps are being taken to keep their travelers safe; track each and every traveler so contact tracing and potential exposures can be verified; and respond with testing, quarantining, and emergency transport capability when necessary.
“It will take time for business travel to recover, but we expect it to recover more quickly than leisure travel,” Richards says. “The key will be when companies feel they can meet the duty of care required to send their employees safely to the places they need to travel.”
Global Rescue also expects to see significant pent-up demand for travel, so when it does start to come back, there could be a surge.
There are a number of factors that will affect the timetable for business travel “bounce back,” according to Mike Taylor, senior director for travel and hospitality intelligence at J.D. Power. “The key would be that confidence in travel is restored,” says Taylor. “It all depends on confidence that travelers will not fall sick, or can be reasonably be assured that if they contract a virus, they can be treated effectively and quickly.”
For airlines, trains, cruises, hotels, and other travel providers, the first requisite will be ensuring cleanliness. Business travelers will be asking about hotel room cleaning procedures, how often planes are disinfected, and what steps passengers can take to prepare differently than they did previously. But these new measures will come at a high price for the suppliers, leaving many to wonder how that will be reflected in final costs later.
“I think we are going to see more and more precautionary measures taken by airlines and hotels to ease business travelers’ anxieties to encourage them to get back on the road,” says Paul Metselaar, CEO and chairman at Ovation Travel Group. Metselaar suggests airlines may need to change their boarding procedures as well as assign seats so travelers don’t sit next to strangers on flights. Hotels will also need to train staff on cleaning protocols and ensure rooms are extensively disinfected during room turnover.
Additionally, the onus will fall on employers to enact policies that empower employees to react quickly regardless of the cost, so that they will not need to wonder if the company will pay for extended leave or costs incurred if they fall ill while traveling.
“Businesses can help with employee health by bolstering their insurance on employees traveling for business, making employees aware of any additional coverage they would get when traveling on business, and being supportive of employees that do become ill,” Stokes advises.
Travel suppliers—from airlines to hotels—will also need to simplify and automate many of their processes and options for the travelers: Fare choices will need to be narrowed, and refunds and exchanges will need to be more available for little or no cost. “Companies and their suppliers would benefit significantly to map out these new procedures together, so both sides are comfortable with the solutions,” Lichtenstein says.
With all this in mind, some industry insiders are trying to remain optimistic. “Travel will absolutely bounce back to pre-COVID-19 levels, but it will take some time,” Metselaar says. “While this is unlike anything the industry has experienced, we have seen travel recover and soar post other debilitating events, like the uncertainty of recovery from the global financial crisis, the fear and anxiety of 9/11, and the Gulf War. Travel is vital to the infrastructure of business and will continue to have an impact on the global economy.”
Stokes expects frequent business travelers will eventually feel safe, but corporations may still avoid large meetings and events just in case. She points out that after Sept. 11, 2001, there was a similar fear that in-person meetings, conferences, and conventions would disappear, but that did not happen. And, she notes, the events industry was stronger than ever prior to COVID-19.
Taylor also differentiates the current pandemic and economic crisis from 9/11. “The system restarted quickly, and planes weren’t being hijacked and weren’t flying into buildings,” Taylor says. “The restart proved that travel was immediately safe again. Because of the lag between infection and symptoms of COVID-19, this time around confidence may take a bit longer to take hold.”
To travel or to teleconference?
Now that millions of workers have become more comfortable with virtual meetings, many corporations will try to reduce costs and risks permanently by moving internal reviews, corporate training programs, team meetings, and interviews online. Lichtenstein estimates this could reduce travel spend and costs by as much as 20%. The silver lining? It would also reduce their carbon footprint.
“Companies are always looking for ways to reduce costs and increase employee satisfaction,” Lichtenstein says. “It is difficult to do because, at times, these two goals conflict with each other. Virtual meetings provide both. Enabling employees to attend a virtual meeting when they are meeting internally solves for saving on the cost of those trips and not having the stress of traveling.”
Certainly, teleconferencing has surged in recent years after the Great Recession of 2008, encouraged as the technology has exponentially improved over the past decade. But there is something to be said about human contact—perhaps even more greatly valued after half the world’s population has been asked to self isolate. “In-person meetings include both verbal and nonverbal messages and intuition,” Taylor notes. “Sometimes those things are hard to capture on a computer screen.”
Lichtenstein acknowledges face-to-face meetings are critical to increasing revenue in any company. “Nothing can replace that experience of sitting across a table from each other and working together to solve your prospect’s or client’s needs,” she says.
Richards concurs, describing trust and personal relationships as the foundation of business. “I think more teleconferencing will occur as a result of the pandemic, but relationships and the trust that comes with them are so important to business that travel will recover. This simply can’t be done via video conferencing,” Richards says. “Digital tools can work nearly as well at conveying information, but in-person meetings and the shared experiences that ensue after are irreplaceable.”
The handshake, however, is likely a thing of the past. Social distancing has become quickly ingrained as the new normal for millions of people worldwide, and medical professionals have publicly stressed that handshakes are a primary source for disease transmission for not only COVID-19, but also the flu and the common cold, among other viruses. “[The handshake] may move away to make room for the elbow bump,” Lichtenstein says.
Rather than have an entire team travel, Lichtenstein expects companies will send out corporate leaders quarterly, while hosting regional meetings with an online option to include the whole team. “I am a big fan of ‘less is more’ if the less is fully optimized and planned before heading to the airport,” Lichtenstein says. Knowing that travel will be reduced and limited in order to meet revenue goals, employees could end up being encouraged to spend more time together online to stay close.
“Online meetings keep the focus clear, the time shorter, and productivity higher,” Lichtenstein says. “Companies will want to avoid unnecessary risk and limit the number of employees who can attend a face-to-face meeting or attending large events or conferences until a vaccine or drug is found.”
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