Why Business Travel Will Never Return

The coronavirus crisis will have long-lasting effects on travel. I don’t think travel companies have internalized this reality yet, with many still projecting a bounce back in the summer and fall and a return to 2019 levels of travel next year or at least by the year after. That’s unlikely.

We can expect fewer ‘must do’ business trips in the future, since videoconferencing is becoming more of an accepted alternative to many meetings that would have been done in person. While the normalization of videoconferencing makes us more location-independent, it also means fewer ‘pay any price’ last minute trips. And don’t expect international travel to open back up to previous levels any time soon.

Bill Gates, who has spent as much time and money studying and preparing for pandemics as anyone, says that business travel will never be the same. Social distancing is going to persist, and that means fewer big conferences and trade shows. It means fewer big restaurant events. It means fewer open bar receptions.

“There are a few things, like business trips, that I doubt will ever go back,” he said. It’s simply a measure of necessity and risk, Gates said.

“In the case of high school, I think the social activity — you know, making friends, hanging out — that you get by being there physically, that’s totally irreplaceable,” he said.

But business trips? Not so much. “There will still be business trips,” he said, “but, you know, less.”

Without a vaccine we’ll travel again, but big group events are going to continue to suffer. And talk of a vaccine in 12-18 months, even though Gates himself is spending billions to help expedite production, is likely fanciful. Even if we settle on a vaccine or two, the process to certify safety and efficacy will take that long at least. And then there’s manufacture and distribution. Initially a vaccine will probably only be available to health care workers (and politicians, who are more important than we are).

I do think that Gates is right though that we’ll see a new equilibrium where business trips – even one on one – won’t be as necessary. There will still be trips, but not all the trips we used to make will be considered necessary in the future.

Coronavirus will mean lasting changes in our lives and our politics. I favor more immigration, but for the same reasons that international travel will face barriers we’ll get less immigration ‘for safety and screening’. We’ll accept greater state surveillance, for tracing infections – tracking movements and whom is meeting with whom, to know who might have been exposed to a disease. Arguments over ‘medicare for all’ as a solution to unnecessary high costs for too many doctors and a wasteful oversupply of ICU beds won’t resonate for some time. Breaking up big tech companies providing us online staples, and pharmaceutical companies working on vaccines, will seem anachronistic. (Democrats are lucky then that neither Bernie Sanders nor Elizabeth Warren became their candidate.)

The idea that we’re just going to go back to the way things were seems unlikely at best. Even as people go back to work they won’t do so in close proximity, and that means lasting limitations on entire industries – not just sporting events but also travel. How does continued densification of aircraft, squeezing more passengers in closer together, look in the current environment? And with a return to normal unlikely any time soon, and facing 20% unemployment in the short term, how are financial markets off ‘only’ 17% at present?

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 InsideFlyer.com, 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. Very well thought-out, written; and a sober assessment of where things stand. As a market analyst who forecast the topping process in January and early February (and ordered PPE gear for home at that time); I had already cancelled flights for 2 stock market speeches I would have presented. Just a month ago while airlines were still shutting down; I called for a trading bottom the day a certain hedge fund character tried to panic investors on CNBC; and labeled it ‘max fear’. It was; now to answer your question; you had the rally (my target was S&P 2700+; not much more than 2800) and it’s running out-of-steam. It was led by the same Algo-based Quant approaches in the same narrow universe of stocks that led last year’s move; hence that’s why the concentration. The S&P is ‘capitalization weighted’; so they focused their active interest (with the Fed having their backs) on stocks they knew could make the best impression; and that’s why I forecast it to thrust this high (led by a few of our inger favorites but I won’t name them here).. Anyway now we will horse around and the extent of ‘retreat’ depends on revising sober reality about when earnings and growth stabilize (it may be 2022 and 2023 rather than late this year and next for much of it); similarly to airline travel; which yes can’t both carry lower load factors and frequencies and make any money. I’m an old Delta Flying Colonel and appreciate their extended Elite status-roll into next year; and I know this finally is going to ease the bottleneck at ATL from international-to-domestic connections (although CBT might hold things up worse than they already were; it’s a reason I flew to Europe through AMS as they had one fight a day from MCO nonstop). I ponder whether they will again; and already know I won’t be going to IFA in Berlin this time; or probably CES in ‘vegas in January. Public speeches? For now virtual only; and I’m fine with that. I suspect others mirror that perspective. Again great write-up! (I’d be glad to do a financial column for you; including the airline industry regularly haha).

  2. @OtherJustSaying~ nit-picking I know, but It was reported by some British news media that Boris was on a ventilator for a time. Nothing wrong with that, and nothing unusual since he was in an ICU under 24 hour watch. (The plebs should not expect that attention).
    You should disregard what “the Government” , i.e. Downing Street spinmeisters say (“just in for routine tests”) as all they are concerned with is the optics. Don’t shake the FTSE.
    It could have easily gone from that to: “It is with great sadness I have to tell you…………”
    I wish the old buffalo good health, and look forward to an announcement of his retirement in due course.

  3. @Glen T. Actually, it is a big deal. People on ventilators with Covid-19 tend to forget how to breath. They tend to be in intensive care for weeks, and then die. In other words, with Covid-19, near death and ventilator are almost synonymous. If they actually leave intensive care alive, lung damage is commonly permanent. If he was on a ventilator, it is doubtful that he could have left intensive care in three days.

    Now, if you just had some oxygen while in intensive care, then you probably were not near death, although I am sure it was serious. Further, I speculate, if you were not the Prime Minister, probably you would not be put into intensive care at all. Who knows, you might not have even gotten oxygen.

  4. This displays a lack of historical research. Exactly how did things change permanently after the Spanish flu? Nada.

    Short term – yes. Doh! Of course things will be different until a vaccine or cure is found. But once deaths level off below annual flu death rate we will be back to normal.

    9/11 and the Las Vegas shootings will have a longer lasting effect on travel (security hassles) than a virus that will fade from the front pages in a couple of years.

  5. @CoolHandLuke: Herd immunity is not only a theory, it’s basically the only way to go in the long term. Of course the herd immunity has to be achieved by a vaccine and not by 80% of the population going through the infection.

  6. I think the headline is misleading. I agree with you that it won’t be the same. But you are not saying it’s won’t return. You are saying it will be different. I agree with you there.

  7. While thought provoking and well stated, I disagree with the idea that “business travel will never return”. It will. There’s too much of a human tendency to assume that the future lies on a straight line trajectory from the present. While that’s often so, there are exceptions and this is one of them. It would be a big mistake to judge the next, say 3-5 years, based on what we’re seeing now. I see airline planners making this error as well. Cancelling new planes, retiring others, etc. Yes, I get the financial implications, but it would be far better to just mothball these things for an extra year or two – because those pre-Wuhan plans will return. Instead. they’re planning for a future based on “now” and “now” is an aberration.

    The need to travel is a fundamental one. It will return, and eventually return in full force. Business requires travel, people need to travel for personal reasons, there are always affairs that need to be attended to. If anything, there is likely to be a quick burst of travel once we get the all clear, due to various affairs that have been postponed for far too long. While it may well take more than a year for this to occur (probably once a vaccine is introduced and distributed), it is as inevitable as the rising of the sun. It would be foolish to assume otherwise.

  8. I think this is accurate re how much travel will happen- there is some business that needs to happen face to face but most can be achieved via video conferencing and as long as people feel it is safe (looking at you Zoom security people) and get comfortable with it, it will be an easy replacement for thousands of dollars in business trips.

    I will nitpick with your statement that universal healthcare is out the window (who on earth said it was to combat excessive doctors and ICU beds? No one I know, nor any reliable article I’ve read). It seems more valuable than ever to promise healthcare to everyone at a reasonable cost and not let insurance companies continue their obscene money-making scam that inflates the true cost of medical care.

    What would be interesting to me is to see where the money on this virus went under republican leadership. I’d also like to see what consumers get in return for the terrific amounts of money being given to the travel industry.

  9. Lara S, I don’t think we need to worry about where this money went. It went exactly where it should. I didn’t get a stimulus check because of how much money I made last year, even though I don’t have a job now. But I am getting increased unemployment. Also the CARES act could not have been passed without partisan support. This is not about politics.

  10. likely Any nation would not have the degree of Covid19 cases without its method of travel! the first case was likely due to transnational conference which spread to family, and friends.
    Hotels, airlines are at the center of travel that is the path by which covid spreads. with skype and facetime, and zoom, it’s easy to communicate and hold people accountable for safe and healthy space for others! air travel & hotel space/resorts suddenly became family first, not business first.

  11. maybe travel during coronavirus is not recommended, but we can travel to places where nobody has headed in the past months, but make sure you carry garmin gps device so that incase there is emergency. you can help. make sure device is updated , thats a personal opinion but i will surely do an update on my garmin express.
    thanks

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