While personal travel and vacations have roared back to life, business travel is crawling back at a slower pace.
In fact, a study from the Global Business Travel Association found that 77% of its 606 respondents cancelled or suspended international business trips as of September 2021. For domestic travel, 38% of respondents cancelled or suspended plans.
COVID-19 variants, travel restrictions, and the ease of online meetings will likely limit businesses to only necessary travel for the remainder of this year. Here’s what you can expect from the year ahead.
Travel Budgets Are Down — Expect More Time Online
For nearly two years, executives have limited travel — embracing the technology that makes contactless connections possible. Finance departments have taken note.
In a Morgan Stanley survey conducted in July 2021, corporate travel managers projected virtual meetings to replace nearly a quarter of 2022 travel volume. Of 138 respondents, 52% expected to reduce their travel budgets between 11% and 50% from 2019.
Last November, Microsoft co-founder Bill Gates predicted that over 50% of business travel is gone for good. In August, a Bloomberg survey of 45 large companies in the U.S., Europe and Asia found that 84% plan to cut business travel permanently post-pandemic. For the majority of these companies, that will result in a 20% to 40% cut in corporate travel budgets.
However, face time remains a crucial part of relationship building. Consulting firm Deloitte’s August 2021 survey of 150 travel managers noted that companies will face more competitive pressure to spend time in person with clients and prospects, driving an upswing in travel post-flu season.
The report also speculates that U.S. business travel spend will continue to be less than that of 2019. However, each quarter, the percentage of spend is likely to increase.
- Deloitte’s projected range of U.S. business travel spend for 2022, compared to 2019 spend:
- Q1: 35%–45%
- Q2: 40%–60%
- Q3: 55%–70%
- Q4: 65%–80%
Both Deloitte and Morgan Stanley cite environmental impact and cost savings as factors delaying travel’s return — and see virtual alternatives as a likely replacement. Executives also expressed the desire to spend less of their personal time on the road.
“The pandemic has highlighted how unnecessary a lot of my travel was and that…I should probably reprioritize my time in many ways,” says Erik Huberman, CEO at Hawke Media. “I think a lot of us fell into a routine of getting on a plane all the time and became very open to travel to the point we overdid it.”
Prepare for Fewer Flights and Short-staffed Airline Crews
In an October 2021 report on the air transport industry, the International Air Travel Association (IATA) announced that net losses for airlines will improve from $52 billion in 2021 to $12 billion in 2022. However, the organization also reports that airlines will continue to struggle with revenue and cancel airplane purchases.
In addition to decreased revenue, staffing shortages are likely to continue in 2022. During the pandemic, thousands of pilots were laid off or decided to retire. Now, airlines must build back their rosters, even though training a pilot can take up to two years.
Airlines like Southwest have limited the number of flights for 2022, taking a conservative approach to staffing levels for the next year.
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Staffing shortages extend beyond cabin crew, as with fewer gate attendants, maintenance workers and shop employees serve an increased number of travelers. Navigating airports will continue to be a challenge.
For executives looking to save time, CLEAR makes the security process faster. Offered by select airports, CLEAR allows users to upload their identity information online before they get to the airport.
When they arrive at the airport, travelers can move to a CLEAR pod where biometric data (including a face scan) will be used to confirm their identity. No boarding pass, travel documentation, or photo IDs need to be confirmed by TSA. This can be used in conjunction with TSA Precheck to streamline the security process. United and Delta memberships offer preferred pricing for CLEAR.
Vaccine cards, vaccine passports and negative COVID tests will still be required in certain destinations. So passengers should plan ahead and gather documentation pre-flight.
Private Jets Will Be More Competitive To Book
With cancelled flights and packed planes, many executives are turning to private flights as an alternative. However, demand is outstripping supply, leaving executives with fewer private jet options for 2022. Supply chain and labor shortages also are slowing production for the aircrafts themselves.
“Private jet operators are running out of aircrafts to sell, or the delivery slots are 10 months out,” says Doug Gollan, founder and editor-in-chief at Private Jet Card Comparisons.
Some private jet memberships provide better terms of use to customers who make larger up-front deposits. That can translate to shorter lead times to book a jet and more options during periods of peak travel.
“It’s a devil in the details purchase, as the contracts can run 30 pages long. So what gets one business traveler to the front of the line — so to speak — is irrelevant for another,” adds Golan.
If you’re looking to score a private plane in 2022, expect to make plans early or prepare to wait.
“We’re currently seeing historic demand and no sign of slowing down, so we recommend our members book out as far in advance for leisure and business travel to ensure they’re able to make special requests for aircraft or time of departure,” says Ken Napolitano, chief sales officer of private jet company Wheels Up.
Expect a Contactless Experience at Hotels
In 2022, hotels will continue to embrace ways to keep guest interactions sanitary and low-touch. Contactless experiences can also help hotels mitigate challenges caused by staffing shortages. A recent survey from Joblist found that a third of all hospitality workers who were forced to leave — or chose to leave — have no plans to return to the hospitality industry.
Be ready instead for an increasingly digital experience.
“Hilton has increased the adoption of digital and contactless arrival experiences to decrease touch points and provide a seamless experience for our travelers,” says Frank Passanante, senior vice president of Hilton Worldwide Sales, Americas.
Passanante says the company has also bolstered contactless offerings in its Hilton Honors App. That includes a digital key to unlock doors from your phone. App users can also walk directly through the hotel lobby to their room, without stopping at the front desk to check in or out.
Hotel Amenities Will Slowly Roll Back
Even with reduced staff, hotels are looking for new perks to cater to executives. While COVID precautions persist, some of these perks focus on the executive’s hotel room.
“Guests can order any of the ‘Work at Leisure’ items to their room through the Four Seasons App. Items include a Dyson task lamp, 23-inch computer monitor, Herman Miller ergonomic chair, color ink printer, wireless mouse, keyboard and more,” says Austin Phillips, director of marketing at Four Seasons Hotel Washington, DC. “We recently added 3 suites equipped with Peloton bikes that have proved to be incredibly popular with business travelers.”
Hotels will also continue to reopen executive meeting spaces in 2022. The Ritz-Carlton Hotels, for example, has begun opening its clubs so executives have a workspace as well as access to meals throughout the day.
Prepare for Changes
The shift from essential-only travel to conference, networking and prospecting business travel has already begun. If pandemic risk factors stay at bay, conference floors and executive suites are likely to see a significant uptick in the last quarter of 2022, according to Deloitte.
The Global Business Travel Association also reports that 2 in 5 companies surveyed in 2021 said they planned to return to business travel in the near future.
Even while travelers return to the road, the experience of business travel — from hotels to airport security and lounges — are likely to conform to the “new normal” for years to come.
