The future of business travel is shaping up to offer more surprises – and more promise – than any of us can imagine
By Dan Booth
We humans are a restless lot. One fact that has emerged out of the shutdown of 2020 is that most of us think travel is essential to the human experience. Whether it’s for leisure time or as a means to an end – like a business trip – we learned that the personal growth and connections our journeys produce are worth the trip.
So despite the pandemic paralysis, the slow recovery, the current setbacks of rising costs and uncertainties, we travel, and we will continue to travel. If anything, that’s the message most attendees took back home from this year’s Global Business Travel Association Convention in San Diego, Aug. 14-17.
While the attendance numbers were not exactly record-setting, the buzz throughout the convention was palpable, and one came away with a sense of energy and anticipation. Buyers were out in force on the Expo floor, in the education sessions and at the main stage events. The reports from the travel managers we spoke with were overwhelmingly favorable: “I met with everyone I needed to see.” “My schedule was totally filled up.” “I saw several new product demos that were really impressive.”
Suppliers, too, seemed to be inspired by the interest their customers showed, the questions they asked and the positive atmosphere. What this tells us is that corporate travel professionals are ready to get back into the thick of things, looking ahead and seeing opportunities.
Short-term Pain, Long-Term Gain GBTA Convention 2022 may have been an occasion to celebrate, but the fact remains that it is far too soon to take a victory lap just yet. While anecdotal evidence on the Expo floor suggests a shift in the prevailing winds toward optimism, the results of the association’s 14th annual edition of the Business Travel Index Outlook – Global Report and Forecast which were presented at the convention revealed a less sanguine scenario for the years ahead.
According to the study of business travel spending and growth across 44 industries in some 73 countries, global spending is not expected to top the pre-pandemic benchmark of $1.4 trillion until mid-2026. This pushes the industry’s recovery out an additional 18 months from the BTI’s previous prediction last November. And this is not the first time circumstances have forced expectations to be deferred.
From the outset of the pandemic, predictions of a right-around-the-corner recovery have come and gone as quickly as the latest variant of COVID-19. The latest GBTA forecast found that the return of business travel so far has been largely driven by improvement in four key factors – the continuing advance of global vaccination efforts, governments easing border restrictions, improving business traveler sentiment and more relaxed travel management policy.
But going forward, the outlook is getting complicated, as pandemic panic gives way to more prosaic, and more multifaceted pressures – fuel costs, labor shortages, the dual shadows of rising inflation and economic slowdown. Presenting the BTI forecast at the convention, GBTA CEO Suzanne Neufang called these factors the “headwinds” that have been hindering a more accelerated recovery for global business travel. To understand them, she said, “all you have to do is look at the news headlines since the beginning of 2022.”
There’s no doubt the devastating pandemic triggered the 2020 plunge both in business activity and traveler sentiment. But since then, the effects continue to linger around practically every touch point in the industry, slowing the expected growth. According to SAP Concur’s latest Global Business Travel Survey, while almost all of the 3,850 business travelers asked are willing to return to the road, nearly two-thirds (61 percent) voiced concerns about cancellations and delays, and over half (51 percent) said they would be unwilling if a trip raised COVID-19 health issues.
Then there’s the matter of cost. Another projection, this one from CWT, forecasts steep increases in airfares, rising 48.5 percent from their pandemic lows in 2022, and tacking on another 8.4 percent in 2023 to overtake ticket prices last seen in 2019. Hotel rates, which were seriously damaged in the pandemic slowdown, have rebounded and in some regions – notably North America and Europe – have already surpassed 2019 levels with the rest of the world likely to catch up in 2023.
So when the GBTA BTI projections point to a global business travel recovery in 2026 reaching $1.47 trillion, finally exceeding pre-COVID levels, that’s all about spend. But how will that travel actually stack up? How many trips does that represent? How will corporations see that greater travel investment contributing to their bottom line? How will post-pandemic generations of business travelers measure their own success?
Possibilities & Perils The answers to these questions – perhaps more than any metrics around spend or fares or rates – will determine what the future looks like for global business travel. And with that, we are stepping into the realm of possibilities and perils.
We are reluctant to call what lies ahead for business travel a return to normal, because what was normal has been so irreparably broken. Recovery doesn’t seem to quite the right word either, since we are clearly moving into a different era.
The good news is, we have largely moved past the anxiety and fear produced by the long, dark months of global pandemic which virtually paralyzed every decision in business and in travel. Now we have entered more familiar territory, challenging though it is. Inflation, recession, economic upturns and downturns – we’ve been through all these things before and, as long as it’s not another pandemic, we know how to handle whatever comes. One thing remains evident: Business travel will prove its worth in the future as it has in the past.
Yet another study, this one from American Express, found that nearly two-thirds of US businesses expect to spend more on business travel and entertainment in the next six months. And the GBTA 2022 BTI predicts both North America and Western Europe will experience double-digit compound annual increases in travel spend in the next three to four years.
That said, other factors are certainly stirring the mix; sustainability, social awareness, different modes of work and different traveler expectations, all mean we are sailing into some uncharted waters. But changes like these will likely prove to be for the better, and where they take us will only enrich our industry. So welcome to The Great Reset.
It may well be that we will look back on the GBTA’s 2022 Convention as a turning point for the future of business travel. To paraphrase Winston Churchill, what happened in San Diego is not the end, or even the beginning of the end.