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With trade shows cancelled and companies limiting or even banning travel, Mark Manduca, aviation analyst at Citi, recently raised the question: “Will corporate travel ever truly recover again?” When the coronavirus crisis is over, will companies that have managed just fine with video conferencing decide to carry on, given how much cheaper it is?
We have heard similar questions before. I wrote an article in the early 1990s, after the first Gulf war and the economic downturn, quoting experts who said company bosses had noticed a fall in costs from the resulting decline in travel and decided to make it permanent. Similar things were said after 9/11. Every economic slowdown produces the same statements.
They have partly proved true. While worldwide airline passenger numbers levelled out during these crises before taking off again, figures from the UK Office for National Statistics and Airlines of America show that business travel has been in decline for decades.
Coronavirus may give this decline another push, but there is an irreducible minimum of travel that business people need to do and that is unlikely to disappear. Corporate travel will return for four reasons.
First, it is hard to establish a business relationship with someone you have never met in person. Basic video conferencing, over Zoom or a competing system, is fine. I have also been in dedicated video-conferencing rooms with a curved screen where you and the person a continent away feel as if you are sitting at the same round table. The screen is so sharp you can read the upside-down headings on your counterpart’s documents.
But something changes when you meet in real life. There is more ease, a better sense of who the other person is, shared jokes — and a greater chance of winning more business.
For bigger groups, video, no matter how advanced, just isn’t good enough.
I spend much of my time delivering courses for the FT’s executive education arm. I have run webinars for students in Asia and the Middle East. They are fine but not as good as being there. On video you can’t walk around the seminar room. You can’t sense the change in breathing and eye contact when people are more or less interested. You aren’t sure where the laughs come from, or why.
Second, while companies grumble about the expense of stands at trade shows, they are an effective way of meeting crowds of potential customers. For smaller companies especially, trade shows save having to make dozens of separate trips.
When I spoke at the Mipim property fair in Cannes some years back (this year’s has been postponed), I was struck by how many European regions, British counties and secondary cities were using the event to reach investors who might not otherwise have bothered with them. Trade-fair statistics are hard to come by but Reed Exhibitions, one of the leading providers, launched 50 new events last year, bringing its total to 500.
Third, bosses will return to travelling. If you run a multinational company, or even a small enterprise in more than one country, you need a sense of what’s happening around your business. Making acquisitions of companies you haven’t walked around and whose products you have never picked up leads to bad mistakes. And if the top people travel, those lower down do too, although often in less comfort.
The fourth reason business travel will return is that we are a restless species, always curious to see what’s around the corner. For all the grumbling business travellers do, there is still that thrill of setting off for a favourite city or for somewhere new. The business travellers will be back.
Read more about the impact of coronavirus
- The latest figures as the outbreak spreads
- How markets woke up to the threat
- How dangerous is the coronavirus and how does it spread?
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