Depending on whose predictions you believe, business travel in the post-pandemic age will either be more important than ever, or forever tamed.
Nonetheless, evidence is mounting that road warriors have begun their gradual return.
A recent poll from the Global Business Travel Association found that 40% of respondents said their company has already resumed nonessential domestic business travel, a positive uptick from its previous surveys.
But with all crises comes change, and whatever business travel landscape emerges post-pandemic could be quite different than the one that came to a crashing halt last year.
From the explosive growth of virtual and hybrid meetings to the acceleration of bleisure travel and shifting maps for airlift, business travel has undergone a rapid evolution. The question on everyone’s minds is whether the shifts impacting both the businesses of suppliers and the experiences of travelers themselves are transitional or transformative.
This week on the Folo by Travel Weekly Podcast:
Power List agency execs Chris Conlin of Conlin Travel and Jennifer Wilson-Buttegeig of Valerie Wilson Travel discuss the comeback of corporate travel.
“Bleisure,” the combination of business and leisure travel, was a buzzword long before the pandemic.
Now, as the U.S. emerges from what seems to be the worst of the health crisis, two trends — a flexible work environment and pent-up travel demand — have created the perfect environment for a bleisure travel boom.
“Bleisure will continue to grow,” said Norm Rose, senior technology and corporate travel analyst at Phocuswright.
Industry analyst Henry Harteveldt, founder of Atmosphere Research Group, agreed.
“Assuming everything lines up, I think you will see a lot more people dividing their time between their traditional home and a remote location,” he said. “Maybe it’s where they’ve got a client based, or maybe it’s just a place they’ve always wanted to work or spend some time.”
Corporate agencies and travel management companies are evolving to meet the growing demand.
“Our travel advisors have been educating themselves to understand the benefits and discounts being offered by hoteliers to attract this type of traveler,” said Angie Licea, president of Global Travel Collection.
Jay Ellenby, president of Safe Harbors Business Travel in Bel Air, Md., said he believes bleisure will present a “tremendous opportunity” to agencies. He pointed to pent-up demand throughout the country as a driver.
The new age of incentives
A different kind of bleisure travel is also emerging, one in which companies send their employees on what are essentially free vacations, said Eric Hrubant, founder and CEO of Cire Travel. The trips don’t include meetings or much structure, outside of a cocktail hour and group dinner, and employees are invited to bring plus-ones.
He calls it “corporate bleisure.”
“I really thought my groups and meetings [business] would be gone for years to come,” Hrubant said. “However, that’s actually one of my strongest [categories] right now: companies basically doing staff vacations.”
Hrubant said he had one group headed to San Juan in early July and four more trips planned in August, September and October. He has a few theories about why his corporate clients are planning the vacations: Profits weren’t impacted by Covid, they saved money on travel spend over the past 16 months and they’re being more liberal with budgets.
Cire Travel has also seen some clients bringing families on work trips and then extending their stays for a vacation.
And Hrubant believes the growth in bleisure will be more than just a trend.
“I think it will stick around,” he said, “because I think we’re changed forever. I think that companies are going to be way more flexible where their teams work, even where they live.”
The virtual shutdown of business travel has forced airlines to revamp just about every aspect of their operations, including their networks.
With leisure travel bouncing back more quickly, carriers have reduced frequencies on business-oriented routes and moved capacity into leisure markets, where demand is the highest.
For example, this July, carriers are flying a combined 46 routes to Yellowstone National Park gateway Bozeman, Mont., compared to just 22 routes in July 2019, according to Cirium flight schedule data. Meanwhile, the total seat count flown by airlines between New York LaGuardia and Chicago O’Hare this July is scheduled to be 104,000, less than a third of the 335,000 seats airlines flew in that market in July 2019.
Southwest provides another clear example of how airlines have shifted their capacity away from redundant business-route frequencies. Over the course of the pandemic, the carrier has added 18 destinations, including places such as Bozeman; Palm Springs, Calif.; Sarasota and Destin, Fla.; and Colorado Springs, Montrose and Steamboat Springs, Colo. In the meantime, Southwest has sharply reduced frequencies and seat counts on business flyer-centric city pairs such as Houston-Los Angeles and Chicago-New York.
Brett Snyder, author of the airline industry blog Cranky Flier, said whether such changes are long-lasting will depend on whether business travel returns to pre-pandemic levels.
“The airlines are just going to be watching,” he said. “They’ll react when they see where the demand is taking them.”
Rolling back in-flight services
Airlines gutted food and drink service across the board at the start of the pandemic due to health concerns. And while social distancing — middle-seat blocking, for example — is less of a concern now, food and beverage service has been much slower to return.
That, of course, raises questions about whether airlines will use the opportunity to make long-term shifts to cut back services. These reductions come after airlines, for competitive reasons, had for years been ramping up offerings across premium and economy classes.
But now, even in the premium cabins typically filled with road warriors, amenities and service offerings by major U.S. airlines are coming back only slowly, and they have yet to return to previous standards, especially on domestic routes.
Delta resumed its first hot meals in Delta One and first-class cabins on domestic routes only in mid-June and only for six transcontinental services.
On United, all food items, including in the Polaris business-class cabin on transcontinental flights, are still served covered or prepackaged.
Airlines have tied the timing of on-board service resumptions to health safety. But Gary Leff, co-founder of InsideFlyer.com, said that if the carriers do bring premium service offerings back to pre-pandemic levels, the timing will actually be based on business considerations.
“It will happen slowly,” he said. “As premium customers return, they’ll gradually bring things back for competitive reasons.”
One of the biggest questions — and concerns -— for the hotel industry has been whether the wide-scale adoption of virtual meetings will permanently reduce demand for the in-person events that are the lifeblood of so many properties around the world.
Even as business travel slowly returns, hotels have simultaneously moved to adapt to hybrid face-to-face/virtual meetings and events.
Earlier this year, Hyatt Hotels Corp. launched a product dubbed Together by Hyatt that includes new technology options and access to experts to help meeting planners as they navigate the evolving landscape.
“While events will look and feel different, we believe there is pent-up demand to create, connect and collaborate, whether that’s in-person or a hybrid format,” Hyatt senior vice president of events, Steve Enselein, said in announcing the product. “We’ve taken strategic steps to bring safety, technology, support and well-being to the forefront of our offerings.”
While many expect more traditional, large in-person meetings to return as the pandemic eases, many hospitality insiders agree that virtual components are likely to stick around.
“What we’re seeing is less adoption of what we’d call ‘full-blown hybrid’ and instead seeing the incorporation of digital experiences into meetings in a way that’s not replacing the live audience, but extending the audience,” explained Frank Passanante, senior vice president for Hilton’s worldwide sales in the Americas. “Events are going to come back to the way they were in-person, but digital experiences are offering the ability to expand with a much further reach.”
Throughout the pandemic, the hospitality sector has also sought to attract professionals working from home by offering “work-from-hotel” promotions that market guestrooms as an attractive and socially distanced home office alternative.
While the percentage of hotel rooms being sold as workspaces is likely to decrease as the pandemic wanes, a more permanent shift toward remote work is likely to create different types of opportunities for hoteliers.
“People may not be reporting to offices every day, or they may no longer have an office, but that creates occasions for teams to get together at hotels and other venues,” said Hilton’s Passanante. “We’ve already seen a real focus on smaller, regional-type meetings, and we think that that’s going to continue, because habits around how and where people are working have changed.”
Challenges for the sector
While business travel begins a gradual comeback, many questions and hurdles remain. Norm Rose, Phocuswright’s senior technology and corporate travel analyst, shared his thoughts about the biggest post-pandemic challenges for the sector:
• Regulatory confusion: The complex nature of government processes around vaccine verification and restrictions for nonvaccinated individuals.
• The ROI test: The need for an internal corporate process that can equate the value of a trip to a return on investment for the company.
• The meetings vacuum: How long will it be before the return of large-scale meetings and conferences, which represents about a third of all business travel?
• Uncertain pricing: In most cases, buyers will find great deals. But as destinations increase load factors and occupancy rates rise in some markets, suppliers may try to recapture lost revenue with premium pricing. This may complicate typical corporate-buyer strategies around volume and their ability to drive market share and bookings.
• TMC consolidation: As large travel management companies (TMCs) increase their pursuit of small-to-medium-sized enterprises, and well-funded startups such as Trip Actions and TripPerks increase their share of the corporate market, medium-sized TMCs that have not invested in compelling tech solutions will find it hard to compete. They’ll either merge with a larger company or simply disappear.