Business takes flight: the new era of corporate travel

Reports of the death of business travel are proving greatly exaggerated. At the height of the Covid-19 pandemic, as the world went virtual, some predicted there would be no going back. Bill Gates, for example, said 50 per cent of business travel would disappear permanently. In fact, the latest data suggests business travel is now almost back to pre-pandemic levels, even if the way people are travelling is changing.

Research from Morgan Stanley, for instance, suggests corporate travel budgets for 2023 will, on average, be just 2 per cent lower than in 2019, the last full year before the arrival of Covid-19. Data from the Global Business Travel Association suggests business travel will bounce back to pre-pandemic levels by 2024.

“The longer people relied on virtual solutions, the more they found these did not provide a complete answer,” says Clive Wratten, Chief Executive of the Business Travel Association. “There’s a completely different type of energy to face-to-face meetings. And there are whole categories of work that can’t be done virtually or remotely.”

Travel, but not as we knew it

Wratten, however, concedes that we are not simply seeing a return to what went before. “There has been a shift in the decision-making process,” he argues. “Companies recognise virtual meetings have a role to play, but they’re looking more closely at the returns on investment in travel, both financially and in terms of their sustainability impact.”

A study conducted by SAP Concur, a leader in the travel and expense management industry, supports that argument. Across 25 international markets, nearly 40 per cent of business travellers said they wanted to travel more. However, while the study shows 82 per cent of companies are returning to pre-pandemic levels of travel, their approach has shifted.

Charlie Sultan, President, Concur Travel, says companies are more focused. “We will see a hybrid approach. Maybe an executive will visit a client once a year in person, and conduct other meetings virtually,” he says. “And where they might have sent several executives to the same meeting, maybe they’ll just send one, with others dialling in.”

For those who are travelling, Wratten believes that short trips are becoming less common. “For a journey to be worthwhile, it has to deliver lots of contact.” Business travellers will spend significant time with a client or meet a number of clients on the same trip, he suggests. “We’re also seeing that employers are more likely to allow employees to extend their travel to take in some personal time.” Blended travel consisting of business and leisure – or “bleisure” – is becoming common, he says.

Another trend is the rise of the intra-company trip. While many businesses still have staff working remotely, a corporate getaway provides an opportunity for employees to come together – to discuss strategic goals, perhaps, or just to strengthen relationships. Some organisations have invested in new venues to host events, while others are waging an extravagant corporate-retreat “arms race” to attract and retain talent.

Managing the return to travel

The return of business travel, particularly in new formats, will require companies to exercise careful control, argues Sultan. “If they’re not managing travel with discipline, they’re leaving value on the table,” he warns. “They may also be putting staff at risk and undermining their efforts to improve sustainability.”

Increasingly, the answer is to automate travel management through integrated systems. Employees need information about the trip itself as well as an automated way to manage expenses incurred. For the company, an automated system allows access to more data so that they can manage costs – by negotiating better deals with airlines and car hire firms, perhaps – but also with wellbeing in mind. Are executives being asked to spend too much time on the road? Are staff able to connect physically with clients and one another?

Sustainability is the other piece of the jigsaw, says Sultan, with modern travel systems able to track the carbon footprint of each trip – covering not just the flight, but also transport used at the destination and even the hotel’s environmental credentials. “If you’re a business that wants or needs to monitor your emissions very closely, travel and expense data will help you do it,” he says.

Indeed, as companies work towards their net zero emissions targets, every part of the footprint counts. While executives may be keen to get back out there, a travel strategy that doesn’t take sustainability into account just won’t fly.