In a 2021 survey conducted by Morgan Stanley, corporate travel managers in the United States, Europe and Asia suggested that their companies will replace about a quarter of typical business trips with virtual meetings in 2022.
Her predictions were very spot on.
Air travel has almost returned to pre-pandemic levels in the US and Europe, led by a strong recovery in tourist demand. But business travel is lagging behind, with some major airlines reporting that corporate sales are still 20% below 2019 levels.
In their most recent quarterly earnings reports, the four largest US airlines – Delta, American, United and Southwest – all told investors that their corporate travel sales were at about 80% of pre-pandemic levels. “Our biggest companies are the ones that are stuck, especially banking, consulting and technology, which used to be among our top-tier travelers, are now on the bottom side,” Southwest chief commercial officer Andrew Watterson said on a call on the 28th. July.
Leisure travel is a bright spot for airlines
The leisure travelers, however, are picking up the slack. The number of air travelers passing through US security checkpoints now hovers somewhere around 10% below the 2019 passenger total.
Europe is seeing a similar trend, according to Eurocontrol data. This may interest you : 43 real world family travel tips that actually work.
Business travel lags behind tourism
A recent case study by the Peterson Institute for International Economics confirms that the recovery of tourist and business travel are on two separate tracks. The study, published July 28, examines ticket data from a major European airline (which the researchers did not mention as a condition to access the proprietary data). They found that bookings to tourist destinations on this airline had already recovered to 2019 levels, but bookings to business destinations had only recovered to 80% of their 2019 levels.
Companies are tightening travel budgets
Airlines have told investors they expect lucrative sales of business travel flights to recover soon. This may interest you : High-tech company celebrates expansion | Daily Sentinel. But corporate travel managers — the people in charge of booking flights for big businesses — aren’t so sure.
Fewer than a fifth of 150 travel managers surveyed by consulting firm Deloitte in February predicted their companies’ air travel would return to 2019 levels by the end of the year. That’s a much more pessimistic outlook than when Deloitte conducted the same survey last year, when a majority of respondents thought business travel would return to normal by the end of 2022.
The slow recovery in business travel may be a sign that companies are following through on their plans to trim the fat from their travel budgets. The most expensive and least necessary business flights have been replaced by video calls, and those trips – the last 20% of business flights that did not return – may never return. “The return of corporate travel has begun,” Deloitte Consultants wrote in an April report, “but the conference technology that has replaced almost all of it since early 2020 is likely to continue to replace some of it for the foreseeable future.”
