It’s been a long wait – business travel is expected to return in phases, spurred by proximity, reason for travel and sector, with travel for in-person sales and client meetings emerging first
The Covid-19 pandemic has presented an unprecedented challenge to the entire business travel sector, but companies that are “agile and keep a pulse on customer needs” will emerge as leaders in the post-crisis recovery, explains McKinsey & Company in an article published last week on its website. While that statement may seem obvious it is a message that is easily forgotten in a time of crisis as is the fact that business travel is critical to so many different industries.
The extensive report from the American management consulting firm follows what has become the set understanding for corporate travel in that business travel will take a long time to return to previous levels after the Covid-19 pandemic eases. Historically, business travel has been more volatile and slower to recover than leisure travel after economic downturns and other disruptions and there is nothing to suggest that will change, albeit it may look rather different when it does return.
However, the ‘For corporate travel, a long recovery ahead’ article does provide some very interesting observations on how the consultancy firm sees the potential structure of the recovery and those areas that will see the quickest revival.
The travel and tourism sector accounts for more than 10% of global GDP and a similar level of global jobs and business travel makes up a significant portion of that – around one in every five travel trips is work-related – and had been expected to grow into a USD1.6 trillion industry this year.
But as we all know, the new decade started with a bang, but rather than delivering growth it was the sound of an industry deflating as emergency measures brought in by governments across the world to combat the spread of Covid-19 effectively brought travel to a standstill.
For businesses those long discussed plans to make greater use of teleconferencing platforms that practitioners had claimed would change the work landscape forever were pulled out of the pending trays and actioned with immediate effect. No longer able to have physical meetings with colleagues, customers and spending much of their time on aircraft, in airports or city hotels, corporate travellers found themselves sat in front of computer screens quickly mastering the likes of Zoom or Teams.
But surely this would just be a short-term issue and life would return to normal after this brief interlude? After all, while business travel spend was sharply hit during the global financial crisis, it recovered, even if for a period cuts in travel spend were reflected both in the volume of air travel and a downgrading in cabin class.
From what was initially a minor inconvenience to what has become an unprecedented tragedy there is now major concerns when business travel will start to recover. After previous crisis it took to two to three years, but those did not entail the months-long shutdown that global travel has witnessed this year and the shadows are deepening with fears of second spikes when some countries have not yet cleared their first.
McKinsey & Company believes that given the volatility of business-travel patterns on top of significant modern technological and connectivity advancements, the economic disruption from the Covid-19 pandemic will have “critical implications for the rebound of business travel” and indicates “a long road ahead for the sector”.
READ MORE via The Blue Swan Daily: It’s been a long wait – business travel is expected to return in phases, spurred by proximity, reason for travel and sector, with travel for in-person sales and client meetings emerging first