If the world ever truly returns to normal, corporate travel could be changed forever. The sector took a huge hit during the pandemic, but things are starting to get better with the green shoots of recovery starting to be seen. The lasting effects could even turn out to be positive, with less travel meaning that big businesses will become more sustainable and reduce their carbon footprint.
Will the global pandemic change corporate travel for the better?
The impact of COVID-19 on travel
The pandemic hit the travel industry hard across the board, with both leisure and corporate travel numbers falling off a cliff. As the world came to a standstill the rise of ‘work from home’ and virtual meetings grew exponentially, meaning business trips were grounded for most. But as leisure travel slowly started to return, one thing became clear: corporate travel was some way behind it, as businesses started to get used to a new way of working.
Corporate travel outlook
However, as daily life slowly returns to normal, so too will the corporate world — meaning an upturn in corporate travel will surely follow.
A recent report by Deloitte that looked at the impact of the pandemic on travel, also explored corporate travel and came up with some fascinating insights and key findings. The report references a survey of 150 travel managers and executives with various titles and travel budget oversight, fielded from May 28 to June 10, 2021. As well as this survey, Deloitte also conducted interviews with executives at companies whose 2019 air spend averaged US$123 million.
Here are some of the key findings at a glance:
- Corporate travel is expected to pick up significantly in the second half of 2021, but will still sit well below pre-pandemic levels
- Total spend in Q4 2021 is projected to reach somewhere between 25%–35% of 2019 levels, although a third of companies say they will likely remain below 25% of 2019 spend at the end of 2021
- Corporate travel that supports client relationships has been identified as the most crucial to business success, and the most dependent on in-person interaction
- For some cases of business travel, the pandemic experience has convinced companies that tech platforms are a viable alternative
- As travel returns, companies are scrutinising both their carbon footprint and their bottom line.
The corporate commitment to decarbonise
This decrease in business travel will help contribute to an increasingly important cause in corporate America: reducing carbon emissions. As businesses embrace tech platforms for meetings and events, so the need for travel has decreased — and those platforms will only continue to get better. This decrease in travel is happening at a time when sustainability has moved into the corporate mainstream, with nearly a third of travel managers surveyed by Deloitte reporting that their company has given a commitment to reduce carbon emissions, therefore putting their travel policies under scrutiny. About half of the survey respondents said they intend to decrease their environmental impact within the next year by optimising their business travel policy, and it’s worth noting that travel is one of the main targets in tackling corporate environmental impact, along with reducing paperwork and greening supply chains.
Of course, in business the bottom line always comes into play. Businesses have seen that savings can be made, but an emphasis on cost saving and commitment to decarbonisation will not eliminate high levels of corporate travel demand. After more than a year of limited travel and a more virtually-connected workforce, leaders now have a deeper understanding of which parts of their business really need travel, as well as which parts can be served equally as well by technology — meaning a positive impact on their bottom line and carbon emissions.
While full recovery of corporate travel is still some time away, this could be a time of rich opportunities. When businesses fully understand their needs and can balance face-to-face interactions with the new virtual platforms, there will be an opportunity to excel in a transformed world of corporate travel.
And that could be better for business and better for the planet.
#ESGforTomorrow
SOURCE: Peter Caputo, et al., Deloitte
