A new report from Global Business Travel Association (GBTA) suggests 2021 will see a spike in business travel, but a full recovery is not expected before 2025. Here’s a look at the situation, and an end trend suggestion for businesses to succeed in these troubled times.
According to a report from Kevin May and PhocusWire, worldwide business travel spending nosed dived by over 50 percent to $694 billion during a coronavirus-hit 2020. To make matters worse, this figure does not reflect the full impact since the first quarter of 2020 was deep in black ink.
While some experts say business travel will never fully recover, GBTA does not seem to think the emergence of video meetings and companies recognizing cost savings will destroy the travel segment. According to GBTA, 2021 and 2022 will see incremental regrowth in spending up to $1.4 trillion in 2024.
The PhocusWire report quotes Dave Hilfman, interim executive director of GBTA, saying the pandemic has devastated the industry, but he continued with emphasis:
“The continued rollout of the vaccine will be central to recovery globally, as will decisions the new Biden Administration makes regarding global trade and border and quarantine policies. GBTA will continue to work on restoring consumer confidence so travel can come back safely.”
An earlier McKinsey report echoed the PhocusWire/GBTA reports showing that business travel is far slower to recover than leisure travel because of the sector’s volatility. The timeframe in the earlier study was also five years, with proximity, reasons for travel, and the business sector key variables. The report says regional and domestic business travel will be first in the recovery.
This was also mirrored in a report last year by Korosh Farazad, Founder & Chairman of Farazad Group of Companies, who also points to some segments of business travel never recovering. Farazad cited Forbes claims, “5-10% of business travel will never return due to let-down and insolvencies of companies that accounted for business travel.”
At the end of the day we are talking about fierce competition in the wake of this pandemic. As Farazad concludes in the HospitalityNet report:
“Companies that are responsive and understand customer concerns will become the leaders among their sectors in the post-crisis recovery.”
I would go a step or two further to advise companies to reassess what will work marketing and adverting wise, as well. Relying on OTAs, for instance, is no longer an option since local businesses will be pressed to differentiate and outperform local competitors marketing-wise. The business and leisure traveler numbers are going to stay way down for the foreseeable future. So, airlines, cruise companies, tour agencies, hotels, and other businesses will need to ensure their offer take precedence.
To be continued…