By: First Union | Date:
The Impact of the Pandemic on Business Travel
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Many people still have to travel for work regardless of what the pandemic has thrown our way. That said, it has affected how we travel, and according to many experts, it will hugely impact what the future of business travel looks like overall.
Given that the travel and hospitality industry were perhaps the two biggest hit in the first half of 2020, it pretty much goes without saying that there are going to have to be major changes to all forms of travel—not just business travel. With hotels, airlines, and resorts for example losing massive amounts of customers, those industries were nearly crippled. Consider the following:
- By year's end, the US expects to see a near forty-five percent drop in all travel—domestic and international.
- Within the travel industry right now unemployment is still at a record 51%; this supersedes the unemployment rate for the industry during the Great Depression even.
- All told the US travel industry has lost more than 250 billion since the start of the crisis.
The numbers are grave indeed. Travel has been impacted in every which way possible. To get back to anything close to what it was, the travel industry has a ton of ground to cover. There are certain categories of travel that are thought to be able to bounce back more quickly than others. While many feel that international travel will be quite slow to make a comeback, business travel, on the other hand, many see as being able to experience a faster "return to normal." Given this, people are wondering what the future of business travel has in store.
Business travel's new normal
The only thing close we have to compare the travel situation now to is that of post 9/11. The entire flight process changed in so many ways. Immediately following the events of 9/11, airlines shifted in a major way to increase security and help protect people. Today, we are seeing similar shifts given the emergence of the virus. Some might argue that stopping an invisible invader is a lot harder than stopping a terrorist—in some ways, they may be right. Some of the developments we are likely to see moving forward as far as the realm of business travel is concerned…
Business travel will be more intentional
Some people estimate that during the first half of the year, there was a ten percent loss in business travel. Many feel that this number may bounce back a little, but will likely remain for the foreseeable future. That is to say, we can expect to see a decrease in the amount of business travel overall. Also, given that there are going to be numerous businesses shutting down by way of hotels and airlines, the opportunities for business travel are being cut down in this capacity as well.
Perhaps the most important factor here though is that so many companies are revisiting their approach to business travel. Where it can be avoided, it most likely will be. There is going to be definite intentionality to when and where people travel for work, a more careful weighing of the circumstances if you will.
One of the good things to come out of the crisis is that businesses are finding they can do more with teleconferencing and other forms of technology, thereby precluding a need to travel to a certain locale. Not to mention, operating in this way versus flying somewhere, they are saving a ton of money, which is extremely important for many companies at this juncture.
Domestic travel will bounce back faster than international
This only stands to reason as so many borders are closed to US passengers and there are now many more restrictions regarding where US citizens can fly outside of the country. Many expect to see an uptick first in-ground travel with domestic flights to follow.
Unclear how long foreign travel restrictions will last
As far as international travel it works both ways; that is to say, the US is also restricting visitors from countries such as China, the UK, and Brazil, among others. Without any clear end in sight, businesses will have to shift how they interact with their foreign peers. And as the country does begin to let more foreign visitors in, it is likely they are going to have to provide proof of testing and/or vaccination when such becomes available.
Expect companies to have stricter policies in place
This will be largely in terms of protocols to be followed when employees do have to travel for business. Companies will offer more and more guidance as far as handbooks and videos even when it comes to sanitization procedures, human to human interaction, and the like.
These are just a few predictions regarding the future of business travel; no one knows what to expect (in any industry/) in the months to come. Things seem to change day to day, and unexpected curve balls are constantly thrown catching virtually every industry off guard. Most are hoping that as we do near the promise of a vaccine, things will return to some semblance of normal. Normal here though is a relative term; what we once thought of as normal, given travel, for instance, is likely a thing of the past. We can only adjust and move forward the best we can.
First Union Lending can help. We've been working hand in hand with small businesses throughout the pandemic. Offering short term loans and lines of credit among other products, we're helping business owners weather the storm and make it out the other side stronger than they otherwise would have been. If you need additional cash right now, we'd love to discuss our funding solutions. We have programs ranging from 5k to one million and many get the cash in their accounts within two business days. Even with less than stellar credit, you can still qualify. Call today and let's get started!