Business trips have been the underpin of countless corporate executives and salespeople. Although hated by some, whilst a great pleasure to others, either way all agreed it was a basic necessity. Staff needed to fly in order to gain new business and to keep up a good rapport with clients. Then of course, there was the advantage of millions of frequent flyer kilometers. 😊
With the onslaught of Covid-19, most everyone has been grounded, which has led companies to find new alternative methods. Phone calls helped, zoom replaced person to person meetings, and in general, business continued, without losing clients.
When coronavirus restrictions ease, will business travel bounce back? Will the pandemic and the problem of climate change, prevent what was a huge sector, stop it making a full recovery? Frankly no one knows for certain. However, after working from home or at least being ‘grounded’, frequent business travelers may now consider it a burden. Being away from family and home can affect health and personal relationship.
Airlines, due the pandemic have already stretched finances to breaking point, and if business travel does not make a full recovery, it could prove disastrous for them. While corporate travelers represent just 12% of passengers, on some flights they can generate as much as a 75% profit, according to PwC.
IATA, which represents 290 airlines around the world, expects business travel to recuperate but at a much slower rate than vacations, due to companies having reduced their travel budgets during the pandemic and zoom conferencing continuing to replace some meetings.
Many corporations believe that face to face meetings with clients far outweighs video conferencing and is worth every effort to reinstate business travel. There is a strong inclination for business people, politicians and others for the need to face constituents and clients.
In the United Kingdom, where the government is easing restrictions on international travel, (some countries are off limits where the pandemic rate is still high) airline management acknowledge the challenges facing business travel, but said they still expect a full recovery.
British Airways CEO Sean Doyle told BBC radio “We’ve been clear that business travel would recover maybe at a slower pace. I think people want to come here, visit and talk about business opportunities, and they like doing business face to face. So I am confident that the segment will recover”.
Suzanne Neufang, CEO of the Global Business Travel Association, said that business travel was “declared dead” following the 2008 financial crisis but eventually made a full recovery despite advances in technology that made video conferencing easier.
But there is no guarantee that history will repeat itself. Several major banks have announced they will sharply reduce business travel to help address the climate crises. In February, Lloyds Banking Group said it would slash travel carbon emissions by more than 50% from the level before the pandemic. Standard Charted (SCBFF), which has its headquarters in London, but does most of its business in Asia, Africa and the Middle East, forecasts that travel will fall by a third. ABN Amro (AAVMY) is directing its employees to travel by public transportation, and use only trains when moving between its locations in Europe. The Dutch bank is aiming to reduce business air travel by 50% by 2025 compared to 2017 levels.
The trajectory of the pandemic is another factor. The longer the coronavirus remains a threat, the more businesses will be forced to find alternatives.
As of the last few days, the European Economic Community (EEC) is now considering, an additional tax on airlines, in attempt to ward off climate change. Although nothing has yet been made into law, the airlines are already resisting this, saying it would be counterproductive, jeopardizing jobs and a further attack on air travel, which is already suffering due to the pandemic.
This is amongst many other considerations across the board for all types of industries, including of course eventually mandating the use of electric cars.
Having no crystal ball to foresee the future, don’t know if Business Travel will be reinstated to pre Covid-19 levels. I also understand the repercussions of climate change, and how important it is we adapt.
However, over the years I’ve seen the incredible success of our MPL Conferences and its importance to our members meeting face to face. Am sure too that those same members appreciate how essential it is to meet their clients and future customers ‘mano o mano’.
As this applies to those companies outside our industry too, whom I suspect feel the same way, and generally for the sake of the global economy recuperating; can only hope business travel does make a complete recovery.
I WOULD BE MOST INTERESTED TO KNOW YOUR VIEWS ON THE SUBJECT.
Please send your comments to me at firstname.lastname@example.org AND if you agree, these will be shown in the next issue of the MPL Newsletter.
MPL NEWSLETTER EDITOR