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  • Writer's pictureThe San Juan Daily Star

Business travel resumes, though not at its former pace

Attendees at the National Automobile Dealers Association convention in Las Vegas, March 12, 2022.

By Jane L. Levere

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 travelers 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 underway.”

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 canceled or suspended. The U.S. 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.

But by last month, Global Business Travel Association CEO Suzanne Neufang said, the association was seeing “significant gains in the return of business travel, especially over the past month or two.”

One active business traveler is Jonathan Adkins, executive director of the Governors Highway Safety Association in Washington, who has been traveling extensively since July for conventions, trade shows and speaking engagements.

He has 11 trips planned between now and the end of September, which, he said, “feels like a lot, more now than what I did before the pandemic, in part because I want to meet with partners and people whom I haven’t seen in 2 1/2 years.”

He added: “We’re catching up.”

In recent earnings calls, the major U.S. airlines all reported upticks in their business travel bookings. American Airlines, for one, said its business demand had already recovered to 80% of 2019 levels.

United said that its business-travel bookings were “rapidly returning” but that they had not fully recovered. It also said it was finding no “meaningful recovery in business traffic” in Asia, where strict coronavirus restrictions are still in place in countries such as China and Japan.

Delta Air Lines reported that its domestic premium revenues in March were “100% restored to March 2019 levels,” with business travel reaching its highest levels since the pandemic started.

And all the major airlines reported that they were able to raise fares to cover higher fuel costs without diminishing the appetite for travel.

Similarly, hotel companies reported that even though they raised room rates, demand was strong, including from business travelers. Jeff Doane, chief commercial officer for North and Central America for hotel company Accor, said last month that the company was seeing “exponential growth in business travel year over year, well outpacing expectations for 2022.”

Mike Janssen, global chief operating officer and chief commercial officer of BCD Travel, said that with the increase in remote work, a “business trip” now often means an internal meeting at a company’s “head office, at a conveniently located office or an off site.”

Some travel experts question how much, if at all, individual business trips will recover. Michael Derchin, a self-employed airline analyst, said that although small- and medium-sized businesses will continue to send employees on the road to meet customers face to face, “a substantial portion of the employees of large corporations will not travel permanently again,” as the companies focus on productivity and cost savings.

Still, after more than two years of remote work and meetings for many people, Evan Konwiser, executive vice president of product and strategy for American Express Global Business Travel, said he believed most travelers were “happy to be back on the road to see and meet with their colleagues and customers in person.”

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