Hilton’s CFO gave an interview promoting the strength of their hotels by claiming that business travel is already mostly back.
We believe business travel is running about 70% of where it was in 2019. That’s still down 30% so we’re not all the way back….We beleive business travel will fully recover. When does that happen? It’s happening now.
Small and medium-sized businesses especially are traveling again, although not yet to the extent that they were pre-pandemic. However business travel isn’t just visiting your plants or factories and going to see customers.
- You can only visit customers that are back in office (for the most part) and many businesses aren’t back to full in-office capacity. That will begin to change after Labor Day.
- While archetypal “visiting clients” travel is coming back that’s only a piece of business travel. Conferences and events aren’t back to normal. Convention business is still closer to zero than 50%.
- And remote workers heading back to the office for meetings, a decent chunk of travel in normal times and expected to grow, isn’t back yet because… many large offices haven’t opened back up to full capacity.
There is a chunk of business travel that won’t return. There are simply more meetings that can be done remotely than there were pre-pandemic. Even when conferences come back, at least initially, many will offer hybrid options rather than having everyone come in physically. The traditional “fly in for one meeting” may not happen as often, or bring in as many people when it does.
All of which is to say there is no universe in which business travel is back to 70% of what it was pre-pandemic, despite the Hilton CFO’s claims. No doubt Hiltons are seeing very strong occupancy levels in the U.S. market – but there’s a huge difference between weekend occupancy and occupancy during the week, especially in major cities.
If this were true, by the way, Delta wouldn’t have just straight-up extended every elite Skymiles member’s status. Unless today’s business travelers all prefer to drive…