Business travel is not expected to return to pre-pandemic levels anytime soon
Since the pandemic began, Kacey Siskind recently traveled to the United States for the first time.
The vice president of business development for the parking application Honk Mobile attended an industry conference held in Texas.
“Our team has been fully vaccinated, and we think we might go our own way and see what happens… We just want to seize the opportunity and really return to this world,” Siskind said.
But in Dallas, you hardly know that there has been a global pandemic. The group discussions and exchange sessions of the meeting were held indoors, with no masks in sight-only many people were eager to re-establish contact.
Siskind said she found the environment disturbing at first, but soon began to appreciate the experience.
Siskind said: “There really is nothing more like meeting someone face to face.” “Nothing is more like seeing them in person and talking to them.”
Throughout the pandemic, only continue necessary business travel; for example, travel related to healthcare issues or critical infrastructure. Work trips related to maintaining or establishing relationships, conducting sales, or attending conferences have been closed.
In an online survey of 640 industry professionals, June poll The Global Business Travel Association, a US-based industry organization, found that 91% of companies said they had cancelled or suspended most or all of their international business travel—a huge blow to the industry.
Slow return from Canadian business trip
Event planners said that in Canada, it is expected that virtual online gatherings will become the norm at least before the end of this year.
Anh Nguyen, an event planner in Calgary, said: “Our friends in the states move faster than us.” “In Canada, we see a more conservative approach.”
Nguyen’s company Spark Event Management has organized many virtual events in the past year. She believes that many organizations—here and in the United States—will not give up all the benefits of going online.
“There is no such thing as a sold out, right? So if you are a 300-person event, you can now reach 5,000-6,000 if you want.”
Nguyen added that with the help of avatars, the Internet, and breakout room software, the industry is getting closer to being able to replicate most of the real-life event experience online—though it will never be exactly the same.
Nguyen said: “This technology has been developed, and now there is a lot of money and investment invested in event technology.”
Virtual parties may be great in some ways, but industry insiders point out that they have little help to the local economy. Business travelers are usually generous. They are often on expense accounts, which benefits hotels, restaurants, taxis, airlines, etc.
Nancy Tudorach, who works with the Global Business Travel Association, said: “Based on pre-pandemic figures, business travel has contributed more than US$40 billion to our Canadian economy.” “This is about our typical. 2.5% to 3% of GDP before the pandemic.”
The airline was injured
McKinsey & Company consultant Vik Krishnan said airlines are particularly dependent on expensive business class tickets.
“Business travelers tend to book tickets late and travel more frequently, and they also tend to buy some more expensive fares,” he said. “Some airlines’ business travel accounts for 50% to 75% of profits.”
A sort of McKinsey’s latest report It pointed out that it took six years for airlines to recover from the impact of the September 11 attacks, and that the industry has not fully recovered from the global financial crisis when the 2008 pandemic hit.
Krishnan said that the scale and depth of the COVID-19 pandemic is greater than any previous crisis. But if business travel is still restricted, he said airlines may not make up the difference by charging more ordinary consumers.
“This is an industry that faces a lot of competition, and is facing quite ruthless pricing pressure and cost pressure. Therefore, it is necessary to deal with an environment where there is not much room for maneuver and flexibility to raise capital and is not unfamiliar with prices.”
The recent emergence of new discount airlines in Canada, such as Flair and Canada Jetlines, may make it difficult for WestJet or Air Canada to charge more.
Business travel may continue to be sluggish
Many companies that rely heavily on business travelers are expected to continue to struggle. McKinsey’s report on the aviation industry predicts that it will not reach pre-pandemic travel levels until 2024, and even so, it will only reach 80%.
Others say that the pandemic may have changed the way companies travel forever.
Kacey Siskind suspects that all business trips nowadays will be evaluated in different ways.
“Is it efficient for us to go to a meeting? Yes, if we were to meet hundreds of people, it would make sense for us to go there,” she said. “Is it wise for me to stay in New York for one night and attend a conference? Maybe not that many.”