Spring break has launched the travel industry into its annual summer frenzy of vacations and leisure trips. And under the radar, business travel has been growing for a few weeks as well.
The smaller but more lucrative segment of commercial air travel has returned much more slowly than the leisure sector, as businesses remain cautious about employee safety and continue to embrace video conferencing and other remote-meeting solutions.
But recent data from several industry groups and analysts indicates a rosier future, both short- and long-term, for business travel than some had previously predicted.
“In 2022, the industry still faces pandemic-related challenges and heightened responsibility to ensure the safety of travelers and workers,” said global consulting firm Deloitte in its 2022 travel outlook. “But travel’s green shoots have appeared, along with opportunities to encourage continued growth.”
Airlines for America reported last week that, from mid-January to the beginning of April, ticket purchases by corporate travel agencies increased nearly 30 percent, to a level 36 percent lower than the same time in 2019.
While that is still a significant lag, it marks the highest level of such purchases since the pandemic began, excepting two brief spikes during the 2021 holiday season.
Henry Harteveldt, president of San Francisco-based Atmosphere Research Group, said many corporate travel managers he’s spoken to have reactivated their programs.
Although 15-30% of employees have told their companies they aren’t yet comfortable traveling, “others are very eager to get back out on the road,” Harteveldt said. “They miss the opportunity to connect with colleagues or clients or address issues in person.”
According to a 2021 report from the Global Business Travel Association, travel by the professional and business services and real estate sectors has been “resilient” during the pandemic, while others may take more time to recover.
However, people are more likely to travel to industry events and external meetings than for company gatherings, according to Deloitte.
“Trips to visit prospects and network at conferences will likely come back strongest, while internal training and meetings will continue to rely heavily on virtual connection,” the London-based firm reported.
There is also a significant difference in travel habits between small- and medium-sized organizations and bigger corporate companies, according to the U.S. Travel Association and industry leaders.
The U.S. Census Bureau reported 5.4 million new business applications were filed last year—1 million more than the record 4.4 million filed in 2020. With the pandemic drastically altering the employment market, many Americans are going into business for themselves, and that requires attracting clients and customers.
“We expect coming out of the pandemic, small business travel is going to be north of 100 percent, because people in small [and] medium businesses have to travel,” said Ed Bastian, CEO of Delta Air Lines, during a presentation to investors in December.
“The size of a small and medium business population compared to the corporate business, it’s roughly the same, the same pool, the same population. We spend all the time on the big corporates because they’re visible, but you’ve got this huge mass of additional travel that’s happening with us.”
Likewise, American Airlines announced in a January earnings call that its small and midsize business travel segment was 80 percent recovered by the end of 2021, contrasting with only a 40 percent recovery by larger corporate travel.
In line with those trends, industry leaders say small business travel will fully recover long before corporate travel. But that’s to be expected, Harteveldt said.
“The travel recovery will not be a monolithic, homogeneous process,” he said.
Harteveldt added he expects the total amount of money spent on business travel to exceed 2019 levels by 2024, but there are too many variables for anyone to be sure.
Inflation, gas prices, new COVID variants and even the war in Ukraine will all affect costs and enthusiasm for travel, experts say, making a clear path forward impossible to predict.
What most agree on, though, is that business travel will return eventually.
“Removing and then restricting travel and gatherings from Americans has solidified the desire to travel, meet face-to-face and connect,” Michael Massari, chief sales officer for Caesars Entertainment, said in a USTA report.
“Humans value unique experiences, making memories and interactions. Meeting is part of who we are.”