The release of a vaccine remained key to the return of business travel, according to the GBTA.
The organisation joined recent calls from the WTTC for more uniform and systematic quarantine rules, with Marriott International calling for stronger decision making from the big corporates.
Dr. Shawn DuBravac, author of Digital Destiny: How the New Age of Data Will Transform the Way We Work, Live, and Communicate told a webinar hosted by the GBTA: “Business travel recovery will be uneven, with innovative and creative companies taking the lead”.
The gathering, which included GBTA interim executive director Dave Hilfman, also found that business stability would be aided by; increased fiscal stimulus from government; more uniform and systematic quarantine rules; and the proposed liability waiver that would grant immunity against potentially fraudulent class-action lawsuits to businesses that follow public safety guidelines and take recommended precautions against coronavirus infection.
The GBTA said that changing prices would not stimulate demand. Metrics showed that travellers preferred going to areas closer to home, signifying that hotels and ground transportation might recover more quickly than airlines.
It concluded: “As consumers start traveling again, their preferences may change. Businesses that have paid attention to the shifting needs of travellers during this pandemic, and then capitalise on this opportunity to offer new and innovative solutions, will come out strong on the other side of the downturn.”
The discussion came after a report from McKinsey, which reported that, in 2018, business-travel spending exceeded $1.4 trillion - 21.4% of the global travel and hospitality sector. More than half of business travel was concentrated in two economies: China and the US.
Historically, business travel had been more volatile and slower to recover than leisure travel after economic downturns and other disruptions to travel patterns. During the 2008/09 global recession, international business travel from the US declined more than 8%, compared with a decline of just 2%for international leisure travel from the US. And although international leisure travel fully recovered in just two years, international business travel didn’t fully rebound to pre-recession levels for five years.
At Marriott International’s first-half results earlier this month, president & CEO Arne Sorenson told analysts that he had seen growth in demand from small businesses more than larger enterprises, commenting: “There is still frustration that too often see big, big companies making decisions about keeping offices closed for as much as the next year; frustrating to us because in a sense that's withdrawing from the economy.
“And while all of us need to make decisions that protect our people, and make sure that we're not putting people out in risky environments before it's ready, there is absolutely no reason for us to be making decisions about what offices look like or what travel looks like in the second quarter of 2021.
“In any event, every segment has gotten better every month; we see government business up modestly; we see special corporate business up modestly. We see that folks are increasingly willing to step out and travel a bit more.”
Sorenson’s experience was backed up by McKinsey, which said that regional and domestic trips would likely see a return before international travel did. International travel would take longer to rebound because of the complexity of government regulations, mandatory quarantines, and the high risk of fast-changing policies. In Asia, to help facilitate economic development, some governments (such as Malaysia and Singapore) were exploring the creation of business-travel corridors under strict protocols that allow exceptions to quarantine measures.
It added: “If China’s still-nascent recovery is indicative of how sectors will return to travel, then other regions will probably see a slower return, based on their industrial mix. Europe and the US have a higher proportion of business-travel spend concentrated in professional and service sectors and less in the industrial sectors that are showing early resilience in China.”
Insight: With the autumn conference season approaching, we all want to get back on the road before the we start to run out of pens harvested from previous gatherings and have to buy our own. This hack hasn’t bought a biro since 1997 and, like an out-of-touch politician asked about the price of milk, has no idea what kind of investment a new Bic might entail.
It’s not just conferences, it’s the deals which happen at them and, we hear, elsewhere. We are heading into what is promising to be a sizzling period for deals and not all of them can be done on Zoom. The higher the number, the less well-acquainted the parties, the more the need to see the whites of the respective players eyes. Brokers we talk to confirm that they currently deploy the nearest staff member they have to a likely participant, but these aren’t always the most senior or most well qualified.
This can’t go on. The survival of many in the sector is based on their selling assets for a decent price. As the WTTC noted earlier last week, there needs to be a better policy from the UK than random acts of quarantine. The government has protested that testing at ports of entry is complex and doesn’t always work. Well it’s being trialled everywhere else, so time to start thinking about how to make it happen or see the UK locked further out of Europe than it risked with Brexit. Freedom of movement comes in many forms.