Is business travel returning? No, and it’s not going to, say studies



The days of high-flying, big-spending business travel may be over for good.

As a new report by research company Morning Consult declared: Business travel will never return to normal.

Tighter corporate budgets and new ways of virtual working have permanently changed business travel, according to the report, titled “Business, but Not as Usual.”

The report says the demographics are changing too — business travelers are now younger and more likely to fly in economy class, with about half earning less than $50,000 a year.

“The old stereotypes of high-spending travelers splashing out for first-class tickets no longer hold water,” the report states.

A different business travel model is slowly but surely becoming entrenched, crystallizing a “new normal” for the industry, according to the report.

Businesses are cutting back on travel

While leisure travel continues to grow worldwide, business travel trips in the United States stagnated last year, according to Morning Consult.

Its survey of some 4,400 Americans showed business trips — both domestically and internationally — rose just 1% in 2022.

Compared with before the pandemic, fewer people are traveling for business — and those who are traveling are doing so less often, the report states.

Nearly one-third of respondents said their companies had changed their business travel policies, most commonly by reducing the frequency of business trips (60%) or by sending fewer employees on trips (56%). More than half (54%) said companies are more closely scrutinizing travel expenses too.

Trips highest on the chopping block include company retreats, trade shows and incentive travel, according to Morning Consult.

Survey respondents said they believed those changes were made to reduce costs, improve employee health and wellness, and because virtual meetings have eliminated the need for certain face-to-face ones.

Senior business leaders in the survey also pointed to sustainability, which the report noted is “a factor that is not tied to temporary events or conditions.”

Pressure to meet sustainability goals

The report is based on a survey of 334 travel managers and executives with travel-budget oversight. It states one in three American companies — and some 40% of European companies — indicated the need to reduce employee travel spending by more than 20% to meet 2030 climate goals.

The report, titled “Navigating toward a new normal,” says climate concerns will likely affect corporate travel gains for years to come.

Global differences

Another report by Morning Consult, published last year, indicated that business travel is down in some countries more than others.

Morning Consult asked business travelers, who traveled for work at least three times annually before the pandemic, when they expected to take their next business trip:

“At least half of French, British and German business travelers who frequently took work trips before the pandemic say they never will again,” said Lindsey Roeschke, travel and hospitality analyst at Morning Consult. “Other areas show more promise though, specifically India, China and Brazil.”

As for how workers feel about their current travel schedules, most report feeling fine about it, at least in the United States, according to Morning Consult’s February report.

Overall, 64% of American adults said they travel the “right amount” for work, while 29% said they wished they could do more, and 7% less, it stated.  

Trips are stagnant, but spending is surging

Trips may not be increasing much, but corporate spending on business travel is rising fast, according to Deloitte’s report.  

Corporate travel spending in the U.S. and Europe nearly doubled last year — and is on track to reach pre-pandemic levels by late 2024 or early 2025, it stated.

While this may appear to be a full recovery of sorts, the report notes businesses are having to spend more because of inflation and higher travel costs.

“Higher airfares and room rates are the largest contributor to growing costs, and they have also become the No. 1 factor deterring the number of trips taken,” it said.

Flexible bookings and employees’ desire for luxury business trips are behind higher costs too, according to the report.   

Companies say they are saving money by choosing cheaper lodging (59%), booking cheaper flights (56%) and limiting travel frequency (45%), according to Deloitte.

And nearly 70% said they are strategically weighing the need for trips — balancing factors such as costs and carbon emissions with employee retention and revenue generation, the report stated.  

Bright spots for business travel

But there are several bright spots for those cheering the robust return of business travel, according to the reports.

International business trip spending is expected to pick up in 2023, according to Deloitte — in Europe, mostly for client work, and in the U.S. to connect with global colleagues at conferences.

Nearly two-thirds of business travelers said they expect to attend a conference or seminar this year too, according to Morning Consult.

“Bleisure” travel — which blends business and leisure travel — is also on the rise, spurred by the flexible work arrangements that started during the pandemic, according to its report.

Employees often pay more for blended trips, the report notes, though many find the “investment worth it” because they can travel more often and for longer periods of time.


Source link