While international and domestic leisure travel has resumed to some extent, international business travel will take a longer time to recover. According to hospitality data tracker STR, leisure tourism will recover to its pre-pandemic levels already by 2022. Conversely, business travel will take up to four years to recover. In this unprecedented time, most companies do not want to spend money on corporate trips, especially now that remote meetings and conferences have become the new normality.
According to STR director Robin Rossmann, people want to travel again, but their companies do not allow them to do so. “This may seem a little conservative, but we don’t have international business travel recovering by 2024 yet,” he said. STR findings are supported by a study conducted by Oxford Economics which proves that the recovery could stretch to more than four years, making it a painful time for European hotels relying on international business travelers.
However, despite the spread of the Delta variant, CEOs of big hospitality brands seem to be optimistic. According to Marriott International CEO Anthony Capuano, the Delta variant would probably have only a small impact on hotel bookings. Other CEOs support his opinion. Additionally, according to a poll released by the Global Business Travel Association, it is clear that employees are willing to travel again for business purposes.
But why will business travel take such a long time to recover? This time, health and safety concerns play only a side role. What is really preventing business travel from recovering are reduced travel budgets, together with ambitious sustainability targets. “People didn’t spend on travel in 2020 and 2021, and they’ll be reluctant to push that back straight away,” explained Rossman. Additionally, it seems like companies are adopting smart solutions to reduce their business travel to an absolute minimum for the future. For example, Business Consulting Firm Cognizant will introduce a pre-authorization requirement for all travel.
But according to Rossmann, these changes in work habits – including a more flexible working schedule – could create new types of demand. “That’s a big unknown, but a big positive upside to these forecasts,” he said.