Business travel resumes, though not at its former pace

Business travel appears to be returning, albeit unevenly, after all but disappearing for most of the pandemic. Despite early predictions that Zoom meetings would supplant face-to-face encounters even after the coronavirus had receded, industry trade groups and hotel companies are pointing to significant upswings in small business meetings as well as larger conventions and trade shows in the past couple of months. Airlines also say bookings by business travellers have recently jumped.

What is not returning so quickly, executives and experts say, are business trips by individuals. Some employers continue to set limits on travel. In other cases, because of Covid-19 restrictions, visitors are not allowed in the offices of the people they want to see.

And reflecting the disparate pace of the recovery, domestic business travel has returned faster than international, and travel to and from Europe has had a bigger rebound than Asia bookings.

Even within the United States, the strength of the return of business travel depends on the destination.

In Las Vegas, the number of trade shows and events scheduled is actually higher this year than in 2019. But attendance is projected to be only 60% to 65% of the pre-pandemic level, said Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority. In New York, the city’s tourism promotion body forecasts that business travel will not exceed 2019 levels until 2025.

Henry Harteveldt, a travel industry analyst for Atmosphere Research, pointed to data on worldwide airline ticket sales that “shows a steady increase in the number of business travel tickets being issued.” That, he said, is “concrete evidence that the rebound in business travel is under way.”

Yet, for all the positive signs that business travel is taking root again, Russia’s war in Ukraine, China’s “zero Covid” lockdowns and the unpredictable path of the pandemic all threaten to stifle a widespread return to 2019 levels from happening anytime soon.

Robert Crandall, former president and chair of American Airlines, said the war in Ukraine could have significant consequences on the global economy. “People want to feel safe,” he said. “This will make them feel less safe, which will have an adverse impact on travel.”

Harteveldt was more optimistic about the prospects for business travel. “If developed countries’ economies remain strong and the war in Ukraine doesn’t spread, then the business travel industry will have a good fall and winter,” he said, “and 2023 will be a good, possibly great, year for it.”

The renewed hope contrasts sharply with the mood two years ago, after most business trips were abruptly cancelled or suspended.

The US Travel Association, a trade group, said that in 2020, domestic business travel spending was down 68% from 2019 levels. And although the spending grew in 2021, the group said, it was still about half of what it was in 2019.

“If developed countries’ economies remain strong and the war in Ukraine doesn’t spread, then the business travel industry will have a good fall and winter and 2023 will be a good, possibly great, year for it.”

HENRY HARTEVELDT TRAVEL INDUSTRY ANALYST