One of the big questions being asked in the global travel industry today is whether (or when) business travel, which in pre-covid times represented the cornerstone of a vibrant global travel industry, will return to “normal”.
According to a 2020 Investopedia study, Pre-covid, business travel made up 12% of total airline travel but 75% of profit, and nearly half of total hotel stays.
Covid, of course, brought an abrupt end to that, as travel became hard and hugely impractical at best, and literally impossible at worst. This caused a sudden reevaluation of business travel – we moved what we do online, not just in small meetings but in large virtual conferences. Travel budgets were an obvious cost saving for firms trying to save money to make it through the pandemic.
And so as the cost profile of business has shifted, and the new ways of working have become entrenched and “normal” – the question of a recovery in business travel feels like a good one, especially as we see a very fast rebound in personal travel (the recovery of boutique hotels has far outstripped that of large global hotel chains, fueled by the natural desire of people to quench their thirst for new experiences, and to reconnect with friends and loved ones).
I believe there are reasons to be optimistic about the future of business travel, for 4 highly interrelated reasons.
1. The inferior nature of virtual relationships
We all know it, but a recent group of studies have confirmed it. Quoting from this article published in Science.org site which highlights a number of studies that have looked at the power of virtual v. real communities and engagements:
“Human relations in computer-mediated communities cannot be as intimate, strong, and affect-laden as in social communities”
Of course there are some industries where the virtual version does not even work. I live in Singapore, where we recently had the Singapore Airshow – hotels and breakfast rooms were packed as heavily lanyarded delegates roamed around. It’s hard to have a virtual airshow.
But even for industries where virtual connects are possible, virtual meetings just cannot replace the value and productivity, let alone the long term relationship building value, of the real thing.
That leads me to my second point – FOMO (or the Fear of Missing Out).
The world is moving faster than ever before, competition is strong, and the need for building meaningful relationships is more important than ever – with clients, colleagues, suppliers, partners.
If you aren’t there doing it, is your competitor? Or MIGHT your competitor be? What if she is?
I would suggest that as it becomes possible to travel and rekindle relationships, people will start doing so. Which will drive a wave of others suddenly feeling like they need to do the same to ensure they maintain and build on these critical business relationships. It only takes a threat or a suspicion that your competitors are out there to make everyone do the same.
Why? Because of point 1! We know that the power of real, personal relationships. And if you are trying to do something virtually that your competition is doing “for real”, I suspect you will very quickly start to see yourself on the wrong side of key decisions.
3. We haven’t figured out the hybrid world yet
Like many people I was surprised at how easy it was to move from our “physical” world to the digital one. But actually in hindsight, it makes sense.
Why? Because we were all equal. Everyone was in a room on their own, with a camera, screen and microphone. Every could mute (or fail to unmute), and hear clearly, raise a hand to speak etc etc. Teams and Zoom were the great equalizer.
The hybrid world, with some people in a room, and others on teams, is a half way house that most people would agree is a shambles, especially when you throw in language and cultural differences.
People on the call can’t properly hear conversations happening in the room, it’s hard to read the room and to interrupt with a comment, there are echoes and tech issues. Plus, think of the confidence you need to have to interrupt a room full of people with a question or comment when you are barely able to follow the flow…
To me either extreme works – so for anyone needing to participate meaningfully in a meeting that’s taking place in another part of the world, they’ll be going there.
4. People liked it
Finally, I think people just liked it. It was an opportunity to connect, an opportunity to see new places, a change of scenery….
A recent article in the FT highlighted this nicely. Paradoxically, though many academic articles call out the physical and mental costs of (excessive) business travel, so many people love business travel.
So while I recognize that for many people the constant treadmill of global travel is not something they want to go back to necessarily, for many there is hope of a new kind of work life balance that yes, does include travel again.
So business travel will be back big time and I don’t think its going to take very long.
I’m going to add one last thought here on why I hope it does.
Travel matters. And I don’t mean that lightly. Larry Fink made this point beautifully in his recent letter to Blackrock shareholders, when he states that Covid has “left many communities and people feeling isolated and looking inward. I believe this has exacerbated the polarization and extremist behaviour we are seeing across society today”.
Travel opens our minds and plays a critical role in bring us together, in building trust, understanding, mutual respect, alignment of priorities, solutions to mutual challenges…. and therefore has a profound role to play in solving our biggest shared problems.