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Prior to the pandemic, business travel made up as much as 75% of airlines’ profits. Those days are likely over.
A Bloomberg survey of 45 major global companies found that 84% expect to scale back business travel after the pandemic.
While Zoom fatigue is definitely real…
… the rise of video conferencing has proven not all meetings need to happen in person. Executives are citing a long list of benefits to cutting back, including:
- Cost savings: Virtual meetings mean no need to spend on flights or hotels.
- Environmental impact: Less air travel means less CO2 emissions, helping firms reach sustainability targets.
- Employee well-being: A recent study found that frequent fliers shared the same cancer risks as obese people.
This is all unfortunate news for the airlines, which lost $126B in 2020 and expect to lose another $48B this year.
However, not all meetings are created equal
According to consulting firm AlixPartners, reasons for business travel are broken down across the following categories:
- 30% customer support
- 25% sales and business development
- 20% trade shows and conferences
- 20% internal meetings and training
- 5% commuting
Airline executives are optimistic that the biggest cuts will come from internal meetings rather than trips supporting customer relationships.
While business travel may never return…
…to pre-pandemic levels, it will remain a massive cost center. The Global Business Travel Association estimates that, at worst, business travel will generate $1.24T by 2024 (down from $1.43T in 2019).
That’s reassuring news for airlines and hotels, which rely on business travel for ~⅔ of revenue.
While some travelers are itching to get back, those who aren’t can thank Zoom for sparing them some jet lag.
