The new year has arrived, and people from all corners of the earth are anxiously looking to move beyond the chaos and uncertainty brought about by COVID-19. As we know, due to widespread shutdowns and stringent health protocols, travel was a particularly hard-hit industry that’s poised to rebound as we progress through 2021. But, what will the travel recovery look like throughout the year, and what factors will influence the recovery process?
These are constant questions, fueled by ominous predictions by prominent figures like Bill Gates. As the CEO of Traxo and someone who’s worked in corporate and leisure travel for more than 25 years, I’m optimistic.
These are my 2021 business travel predictions.
Setting Realistic Expectations
Though the economic impact of COVID-19 may be similar to the 2008 recession, I believe the economic rebound will be stronger once vaccines become widespread in early summer, resulting in a revitalized travel industry. Nobel laureate and economist Paul Krugman, agrees that economic recovery will be “much faster” than people expect, citing pent-up demand and increased house-hold savings, among other factors.
A Steady Recovery and Strong International Travel Rebound
Leisure travel has already begun its recovery and will return most quickly – followed by regional business travel, then domestic business travel. Though it will be the last to bounce back, I anticipate that international business travel, in particular, will rebound more strongly than other experts predict.
Continuous virtual meetings aren’t a sustainable option when employees are spread across countries and timezones. These meetings can create unrealistic expectations for availability and diminish a healthy work-life balance. For international businesses, it’s better for employees to meet in-person periodically rather than being bombarded with conference calls at all hours – day or night.
If there’s one thing we’ve learned from the pandemic, it’s that work-life balance is fundamental to our wellbeing.
However, a return to travel doesn’t mean travel will look the same. Given that we’ve all adapted to remote work and virtual meetings, business trips will need to be significantly more essential to gain corporate approval in 2021 and beyond.
The Value of In-Person Meetings Will Have a Higher Threshold
Looking forward, companies will need to work to objectively quantify the value of in-person meetings by placing a dollar amount on the amount and quality of work produced compared to virtual sessions. For the foreseeable future, the ROI of business travel will be under increased scrutiny as travel managers and executives attempt to strike a balance between traveler productivity, employee morale and risk management. This higher threshold for in-person meetings will eliminate the countless run-of-the-mill meetings held prior to the pandemic. For some companies, “Road Warriors” may be a thing of the past.
Lower Corporate Travel Budgets with Higher Spending Per Trip
For business travel that does happen in the future, corporate budgets are likely to be tighter and employee standards higher. These updated budgets, travel protocols, and employee expectations point to the ways business travel will change as the industry settles into a “new normal.”
Due to more stringent budgeting, overall spend may go down. However, trip-level spending is likely to increase because non-stop travel will gain favor over cheaper connecting options. These streamlined trips minimize travel time – and thus exposure to others – to keep employees safer. Focus on cleanliness, sanitization and security standards will likely make chain and higher-star rated hotel reservations the standard for business travel, at least for 2021. We also expect that trip length will increase, as companies will expect employees to accomplish more per trip versus taking more frequent, shorter trips.
In-Person Meetings will be Even More Important
Countless people have yet to return to their offices or see a co-worker face-to-face. Our ability to adapt to remote work so seamlessly is a testament to our resiliency and technology, but we’re innately social creatures. Workplace bonds are essential to career fulfillment. That said, I believe business travel and in-person meetings will become more critical as we move forward since these trips will be less frequent and more meaningful. New travel trends will lead to better networking opportunities and client engagement in a single venue than multiple trips over time.
Complete Travel Data is Non-Negotiable
The future of business travel management will be data-driven, and complete visibility into employee travel arrangements is now non-negotiable. As a result of the pandemic, expectations for traveler safety and support are higher than ever. If itinerary blindspots prevent companies from knowing where travelers are or plan to be, they’re putting themselves and their travelers at unnecessary risk. Providing corporate travel buyers with access to real-time travel data in a centralized location will be key in moving forward responsibly while improving spend management, savings, supplier negotiations, traveler satisfaction and productivity. In an environment where booking trips needs to be flexible, real-time pre-trip data aggregation provides the lead-time required for trip changes and cancellations with minimal financial impact.
TMCs will Move to Subscription-Based Business Models
Over the last decade, companies came to accept per-transaction fees as the standard business model for TMCs. When transactions took a nose-dive in March of 2020 – with air travel falling as much as 95% – the transaction model suddenly became deficient. Companies still needed their TMCs, but since transaction volumes dropped dramatically, TMCs have struggled to survive the pandemic, resulting in mass lay-offs, furloughs, and some business closures. To future-proof the valuable services provided by TMCs, many will look to transition to subscription-based billing or a hybrid model. Considering other industries, this subscription-model trend was likely on the horizon for TMCs despite the pandemic, but the sudden disruption will certainly abridge the timeline.
What do you see on the horizon for business travel?
The pandemic and dramatic way the travel industry was economically affected has impacted each of us differently. What do you think the future holds? If you’re optimistic about business travel’s recovery or foresee even more obstacles ahead, please visit us on LinkedIn to share your 2021 business travel predictions.
To learn more about how Traxo can improve corporate travel management for your business by eliminating booking blindspots, reach out to one of our experts today!