For most of the economy, the big question is when will it be safe to travel again? For business travel, it’s about who will actually want to – and whether companies can justify the cost.
It’s no secret that face-to-face meetings are regarded as deriving more value than those held virtually – business travel spending hit a pre-pandemic peak of $1.4 trillion after all. But with many wading into the debate about its return post-Covid, including Bill Gates who suggested that more than 50% of business travel will disappear, the focus has turned to how it’s possible to prove that travel is of actual value.
Bill Gates does have a point, especially with the continued effectiveness of video conferencing technologies and critically, the money companies have been able to save – something regularly cited on recent earnings calls. Companies are clearly in no rush to send their people back out on the road.
However, the roll out of Covid-19 vaccinations across key regions is starting to at least get business travel back on the management agenda.
The vaccine rollout is something that has undoubtedly provided some much-needed hope to the industry, especially as a recent survey by the GBTA found that 79% of members would feel ‘comfortable’ or ‘very comfortable’ with travelling for business after receiving the vaccine.
Yet with this increased confidence to travel, there is still extreme caution from governments and administrations in managing the movement of people in order to contain the risk of outbreaks or new variants.
So another thing that is gathering speed is the prospect of a vaccine passport – or a digital health passport.
In the same GBTA poll, respondents were asked whether they’d support airlines requesting proof of vaccination from travellers. Almost two-thirds said they would. Yet there are huge privacy concerns as summarised in Skift recently: “there’s a shift towards vaccines as the answer to restoring confidence in future business trips, but companies will need to have all their staff onboard — and maybe some lawyers, too — to make it work.”
It’s a situation that businesses would never have expected to be in, but absolutely need to consider as business travel returns. In fact, the current lack of international consensus on travel during and post-pandemic creates a huge predicament for businesses. As Travel Weekly reports, testing and vaccination programmes will be crucial to kickstart international travel but that this kickstart has to be led by governments, with clear communication about what is and isn’t allowed.
Working from home fatigue
However, irrespective of how any sort of passport develops, we’re still far from out of the woods with this pandemic. Parallels are often drawn between Covid and previous events including the 2001 US terror attacks and 2008 financial crisis. But the drop in business travel spending last year was 10x worse than either of those.
Many are reporting on recovery: CityAm stating that global business travel will begin to recover this year – but not to pre-pandemic levels until the middle of the decade; news of increasing air ticket sales by US travel agencies; and the Wall Street Journal declaring that frequent fliers are itching to take off a year after being grounded. Working from home fatigue is very real.
But even when most have been vaccinated and controls subsequently eased, it’s expected that short haul and leisure travel will rebound far quicker than business travel. And it would be remiss to ignore that many countries may need to adjust lockdown measures to manage the ongoing effects of the pandemic on healthcare. So where international travel might be possible one week, it may differ the next and with these on/off periods of demand, ticket costs will inevitably rocket.
One thing that’s guaranteed is that the recovery will be patchy. Most cities in the US and Western Europe still have high infection rates and it will take time for business travel to pick up in these regions. And there’s an interesting outcome to this. Countries are racing to become safe spaces; destinations with low-risk Covid environments where meetings and conferences can safely take place. Right now Singapore and Dubai are leading the race. The World Economic Forum, traditionally held in Switzerland, was cancelled twice in 2020 and now will take place in Singapore in August.
Do meetings actually matter?
If companies weren’t using video conferencing technologies including Zoom, Microsoft Teams and Google Hangouts before the pandemic, then they certainly are now. Overnight they enabled businesses to continue operating but can they fully replace the human interaction associated with being face-to-face?
No doubt this debate will play out for years to come – every week it seems like a big company announces its intention to allow employees to work from home indefinitely. Hybrid working models are being touted as the new norm and offer a sensible middle ground, arguably something that many adopted or demanded pre-pandemic.
But the reality is that human interaction is a key element to partnership and success. Our VP of Product, a serial remote worker, has talked about it before:
“I’ve been a remote worker long before the current COVID situation and I am sure of one thing: remote working means more business travel not less. Nothing replaces looking somebody in the eye shaking their hand and talking freely about a situation. Think about in your own life. Are you happy and content with the personal interactions you’re having with your family via calls only?”
So we’re fairly bullish on the idea that hybrid working models will actually mean more business travel, not less. When you have a distributed workforce, teams are going to want to get together on a frequent basis and this will start to include those that never really travelled before. Add Zoom fatigue to the equation and workers are craving that change of scenery which results in travel.
The key from here on will be about assessing when travel is absolutely necessary to do business.
As a recent article from The Washington Post, “I even miss the airline delays: Meet the business travellers who can’t wait to get back on the road”, reported there’s widespread acknowledgement from travellers, that even though desperate to get on the road again, some trips in the past were completely unnecessary and that companies will start to question the need for travel in the future.
The introduction of purposeful travel
Scott Gillespie, business travel industry expert and advisor, recently declared: “we’re entering a new paradigm, one grounded by questioning the need to travel.”
In his ‘10 principles for justifying business travel’ he argues that trips don’t create value, meetings do – and that the cost of virtual meetings includes lost attention, inferior personal dynamics and an overall greater risk of poor meeting outcomes. Organisations must be able to credibly assess the merits of a meeting in person and that this is only possible when enough data is available to predict when travel is necessary. This has been at the core of SalesTrip since its inception.
Festive Road, a provider of insights, strategy and engagement services to the corporate travel ecosystem, recently launched this as “Purposeful Travel”, arguing that the downtime in travel provides a unique opportunity for company leaders to think about travel as a growth enabler versus a budget line. A purposeful travel model “enables a smarter conversation that focuses on where being there in-person will expedite or improve the outcome.”
If there’s one type of trip that’s most likely to kickstart this the minute it’s safe to do so, it’ll be sales and customer success teams back on the road establishing face-to-face contact with revenue-generating prospects and customers. And, as we discussed in a recent blog, it’ll likely spell the end of the single-meeting trip as company leaders demand more from each trip.
Companies badly hit by the pandemic will need to adopt this sort of model in order to preserve cash without hampering business growth. Those who don’t will lag behind their competitors.
Ultimately, travel has and will always be a target for finance. Pre-pandemic, how often did travel bans get implemented when a company needed to cut costs? By getting ahead and justifying the tangible value of travel with supporting revenue and customer data, finance and travel teams will become better aligned and united in their view on the impact of travel on the bottom line.