One Chart Shows Why Managed Business Travel Will Be Permanently Impaired

At the beginning of the pandemic I argued that the naysayers were wrong – we would not social distance forever, and a vaccine would help bring back travel – but business travel would still never fully return.

We’ve incurred the one-time cost of transitioning to online work, and it turned out better than many expected. There’s been a return to office but it won’t fully come back. And some meetings really can be done over Zoom, even if it isn’t the same thing as in-person.

People are no longer afraid of Covid-19, in the limit. Travel overall has boomed. Restaurants filled up. But office towers did not.

Here’s one chart showing work from home has become permanent. And that means managed business travel will be permanently impaired.

Some companies wanted employees back to work, but it usually wasn’t every day. There have been fewer meetings in offices because the people you’d meet with aren’t always there. And when they’re in the office, they often take meetings with other people in the office over Zoom (or, heaven forbid, Teams).

There’s an equilibrium developing where substantially more jobs are done from home than before the pandemic. We aren’t going fully back to office. That means there’s a lot of business travel which no longer makes sense.

  • Visiting customers in their office happens less when those customers aren’t in their office.

  • Consultants don’t need to spend the week at their clients’ offices. The “Monday – Thursday consultant travel week” doesn’t exist in the same way anymore.

  • More work from home means former office workers have invested in becoming optimized for Zoom, and more meetings can be taken that way. It’s much easier to do Zoom meetings than it used to be, so at the margin that means fewer in-person meetings.

Some companies are pushing for return-to-office. They’re looking at metrics like how many meetings are being held on Fridays instead of how productive employees are. A recession may give companies more bargaining power. But even so return-to-office doesn’t always mean returning every day, and as long as there’s less in-office work than there used to be certain kinds of business travel will remain impaired.

People who work from home will travel to a big company retreat once a year. They may go to a conference, take a business trip, but many won’t be on the road the way they once were.

There’s a new kind of business travel, commuting occasionally from remote work to the office instead of taking the train or the freeway. But office towers are going to take a long time to fill back up because there’s a new equilibrium where not as much office space is needed per worker as before.

Eventually total business travel numbers will grow beyond what business travel numbers used to look like because of the pandemic, the result of compounding growth, but we won’t be as high as we would have been without this exogenous shock.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I did Teams meetings with everyone IN the office (since in the office was required), just because the meetings are so much better. Everyone can see their own screen perfectly, sit in their own comfortable chair and all participate. In a meeting room, yes there are some benefits especially audio, but if it’s screen intensive usually a few people can’t see well enough.

  2. Agree and I will also add that, due to the results with online meeting and collaboration tools, companies are taking a harder look at travel expenses and not authorizing as many trips. I agree there are some positions (mainly in sales) where travel may still be required similar to before but that is the exception not the rule. I’m sure some on here will go with the “I’m traveling as much as before” line but understand you are the exception. I’m retired now but worked for 40 years with software companies, as a senior IT executive of national companies (CIO and CTO) and in consulting so I fully understand the travel dynamics. To add on I would argue that trade shows and conferences will never recover fully because, again, companies are looking at the cost justification of attending these. The vast majority of companies will still participate but they may send 10 people instead of 20.

    Finally, with the coming recession (may around be here) corporate budgets will be further restricted and travel is one of the first areas many companies look to cut.

  3. I don’t expect white collar travel to ever return to what it once was. However, blue collar travel seems to be higher than ever. I think this is due to the severe shortage in skilled tradespersons. Often, this kind of travel is auto or truck based. To me, this suggests fewer first class seats on planes but the need for more budget and midrange hotel rooms across the US.

  4. @JL100: Exactly right. I can’t count the times pre-panemic I had to carve out a week to fly 5-7 time zones ahead, in order to show up to an office severely jetlagged, only to spend much of the time standing up and looking at someone else’s computer monitor over their shoulder, while I balancing a writing pad on one arm and trying to write frantically the details related to the data-intensive spreadsheet or program they were explaning. Slightly better was everyone sitting in a conference room looking at a common screen from an angle (with font too small or with too much of a glare to see well), but it solved only some of those problems. Meanwhile, I would either lose my weekends or necessary work days in order to arrange for and complete the travel. As much as I hate Teams, it’s still vastly superior to those in-person experiences: faster, more efficient, more comfortable, no T&E costs, no jetlag, no getting stuck in an airport or hotel in a foreign place because of cancelled/delayed flights, and no additional personal costs (e.g., petsitter, travel gear/toiletries).

  5. You keep repeating this very matter-of-fact statement about the Mon-Thurs consulting travel week being dead. I am curious about your source for this statement, given that my firm and every peer firm I have insight into is absolutely spending as much time with clients as ever.

  6. The demographics of who uses public transit seems to have shifted as a result of WFH being a bigger part of the picture.

    That will have consequences on the ability to pass fare hikes and also on the ability and willingness for the public to subsidize investments in public transport systems. More immediately, it seems to lead to more extreme variability in passenger loads throughout the week and may have consequences in terms of scheduling and even user safety and security.

  7. @CW – Obviously your question is for Gary but I can tell you from my experience much of the standard Mon-Thurs consulting business is significantly below 2019 levels. Before I retired (after almost 40 years in IT) I was a director helping run the healthcare consulting/integration group of a leading services firm. I stay in touch with some people I worked with and their level of client travel has fallen off a cliff. They now do much of the project management and even the technical programming remotely using collaboration tools and VPN.

  8. @Gary presupposing that your assessments are correct — and I tend to think they are, looking at passengers in AA’s transtlantic Business and First cabins where I see more seasoned pleasure travelers than business folk, then what does AA do to Concierge Key? Which both you and I have a vested interest in, having said I don’t expect to renew this year.
    Regardless of popular opinion, CK is NOT spend based. And the passing of Airpass means there’s no option to buy in — although I doubt many really did. CK is for people who influence others’ travels, think travel department managers.
    Soooo…. does AA change the program parameters, do away with it, make the criteria public, or do nothing?

  9. @AC I suppose for pure number-crunchy stuff that could be offshored anyhow it makes sense for the move to remote to stick, but all of our traditional client facing people are basically fully 100% back on the ground. Both clients and colleagues have basically demanded it (the latter because development of new colleagues was really suffering in a remote setting).

  10. Costs, that is a key word here that you missed. Working from home saves companies money because they just don’t need the office space like they used to, so less rent, less utilities, less toilet paper and janitorial, less parking, and it goes on. Add to that less travel, so less flight fares, hotels, meals, and incidentals as well. I think the age of the road warrior is over. They have learned a new way of doing business.

    I remember a United Commercial from back in the early 90’s showing the boss telling his people to go out and re-engage with their clients and handing them tickets on united to do just that. But that just isn’t necessary anymore.

    Companies that insist on people returning to the office will find a lot of resistance. I wrote at the beginning of the pandemic that I thought working from home would become the new normal. Lots of people said no. Here we are over 2 years later and not only it is the new norm, but people are quitting jobs (Twitter) over it. My neighbor worked in a small office with 15 other people. They were looking at shutting down the office before the pandemic and having everyone work from home anyway, the Pandemic pushed the plan forward. Now only 2 of them still live in the area. The rest sold their homes and fled the area. As long as a person has good internet access, they can work from home. These companies that insist on bringing people back to the office are being irresponsible to their owners and shareholders because they are incurring unnecessary expenses in the pursuit of being an overlord to their subordinates so they can micromanage people. (Twitter again).

    So yes, business travel will not recover, not for years, and I don’t think ever. Yes, as you state, people will go to conferences and retreats once in a while, but that is it. Airlines will need to adjust. Once this leisure boom wears off, I think the work from home people will continue to itch to get out, but will be paying for their own vacations, and not on someone elses dime. So, they will be cheap. This will be another adjustment for the airlines similar to the 90’s when ticketing went from travel agents to online and all of a sudden price was a major deciding factor on if you sold a ticket or not.

    American has already started this, though I’m not sure if this is why, with their elimination of international first class and replacing it with business class. People still want to travel in luxury, they just aren’t willing to pay as much for it as their employer may have. Business class is cheaper, but better than coach. The airlines will need to sell more business class to make up the difference. Right now that seems easy, but we all know a recession is only a matter of when, not if.

    And these employers that incist on coming into work are going to learn that they now have to compete against employers for a shrunken skills pool that wants to work from home, and will pass up a better paying job to do so. They don’t want to fight the traffic, ect. Heck, like my neighbor, they want to live in another state. Personally, if I could live in a place where the nearest Fast food is more than 50 miles away, that would be fantastic!

    At the same time, that smaller work force will push wages and benefits up. But working from home is cheaper since you don’t need to maintain a wardrobe, transportation is non-existent, food is cheaper,ect. And, you don’t need to spend time away from your family being a road warrior.

    Being a road warrior verses traveling are two different things. Going to New York on Business verses going there on vacation are two different experiences. No one wants to be a road warrior. They want to travel.

  11. Providing a travel department manager an unearned CK benefit to influence their decision making sounds like a perfect example of bribery to me. If my travel department manager was making decisions not based on maximizing value of the travel spend for the company, they would be looking for a new job.

  12. @jcil it does not *sound* like bribery, it is. And yes, that person would be fired in my company as well, for cause (no two weeks severance etc. etc.).

  13. “”Permanent” is a long time (infinitely long by definition) and, just as most of us were surprise by relatively successful Covid induced transition to Zoom etc., we don’t really know how things will develop in the long term. For example, if a convention defying firm in a particular industry believes it can gain market share by travelling intensively and visiting clients, even if that entails talking them out to dinner or lunch near their homes or visiting them on their Tuesday-Thursday in office days and it works’; it won’t be long before competitors change their travel plans. I’m not predicting it, but I do think there’s a real chance that predictions of permanent change will be proven wrong.

  14. Why then is it almost impossible to find business awards on so many routes, and particularly the business routes?

  15. I don’t necessarily agree that local commute charts equate or allow us to determine the pace of business travel. The transportation options aren’t the same. As companies close local offices more people are now traveling even if is occasional where they did not travel prior. I believe sustainability and purposeful travel is the current limit on a frequent business traveler. This will continue until SAF is a 0 carbon output.

  16. @Jerry329 – The end of your post outlines exactly what I’ve seen in my corner of the professional services world. The messaging from the top has been “Be in the room with your clients, or the competition will be”. And I know all the peer firms are thinking the same way – I literally see them on the ground at the same client sites, the same boring Westins are solid out 100% of the time just as they were in 2019, and that is why I questioned above the statement about the consulting travel week being gone.

    @Steve – Two reasons: 1) “Business routes” are also personal travel routes for the wealthy, who are traveling like mad; plenty of rich people wanting to go JFK-LHR etc., 2) Businesspeople are traveling on “business routes”. The big conventions in Orlando, the salespeople traveling to every little regional offices once per month, etc., that volume is down. But executives, lawyers, consultants, etc. are flying as much as ever.

  17. In California, public transit has alienated riders by accommodating increased numbers of mentally ill or under the influence passengers who incidentally aren’t paying the fare. One encounter with a menacing person loses those customers forever. Also traffic is down a bit. For these two reasons, some former transit riders are driving to the office. Office work may not be down 35%.

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