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Business Travel’s Return Will Be Cautious and Client-Centered

Deloitte’s latest Corporate Travel Survey predicts a slow return with many variables through the end of 2022 and beyond

Deloitte’s Corporate Travel Survey, Return to a World Transformed: How the Pandemic is Reshaping Corporate Travel, sees a slow, cautious return to business travel, bounded by considerations like pandemic restrictions abroad and corporate mandates to return to in-office work after over a year of working during lockdown COVID-19 restrictions.

Key takeaways of the report:

  • After more than a year of cancelled meetings, conferences and tradeshows, and closed workspaces, business travel will accelerate in the second half of 2021, but will remain well below pre-pandemic levels.
  • The reopening and return to office-based work will be a primary trigger to reinitiate corporate travel, though executives are cautious of the impact that continued uncertainty around the pandemic will have on both returns. Just a third of companies expect to reach or surpass 50 percent of 2019 travel spend levels by the end of 2021.
  • Although business leaders expect steady increases, corporate travel is unlikely to make a full recovery within the next year. Just over half (54 percent) of survey respondents expect their companies to reach 2019 levels by Q4 2022.
  • Until immigration policies of major US trading partners allow for border crossing without the need for quarantine, US corporate travel will remain primarily domestic. And even when policies enable better ease of movement, the unpredictable and uneven nature of the pandemic across countries and regions will depress international corporate travel demand.
  • As travel returns, both cost containment and a corporate commitment to reduce carbon emissions will impact the volume of travel, as many companies see limiting trip frequency as a means to address both.
  • Travel use cases that support client relationships have been identified as the most crucial to business success, and the most dependent on in-person interaction. Visits to prospects and clients will lead the business travel comeback.

The caution surrounding the return of business travel is in contrast to the findings of a similar Deloitte poll of leisure travelers taken in May. The Summer Travel Survey 2021 found four in ten Americans planned to take at least one vacation this summer, a percentage similar to pre-pandemic summer travel of 2019.

While the eventual scale and shape of corporate life in general – and corporate travel in particular – are unclear, they are returning, Deloitte said in a statement accompanying the findings. Many companies plan to significantly accelerate their return to offices following Labor Day, and an uptick in corporate travel is expected to follow.

The report also notes that international travel cannot return at scale until health realities and border policies allow better ease of movement.

Quarter-by-Quarter Forecast

Taking into account these triggers and other potential factors putting a drag on business travel’s return, as well as companies’ travel spend estimates through the end of 2022, Deloitte has developed quarter-by-quarter projections of corporate travel’s return.

Two scenarios account for the range of likely outcomes through the end of 2022. A strong recovery of business travel assumes continuous easing of border restrictions in much of the world. It also assumes continued COVID-19 vaccination progress and no prolonged or large-scale outbreaks in the US.

A weaker scenario accounts for a slower improvement in public health and border openings, and more reticence among travelers.

Deloitte’s projections, based on the survey and executive interviews, show US business travel increasing throughout the remainder of this year, from 10 to 15 percent of 2019 spend in Q2 2021, to 25 to 35 percent of 2019 spend by Q4 2021.

While many conferences will return to live or hybrid formats by end of this year, about one-third of companies (36 percent) say Q4 2021 travel spend will remain below 25 percent of 2019, and two-thirds (66 percent) say it will be below 50 percent.

By Q2 2022, US business travel spend is expected to increase to 40 to 60 percent of 2019 spend as workers get through the end of cold and flu season and a more consistent schedule of live and hybrid industry events emerges.

By the end of 2022, US corporate travel will reach 65 to 80 percent of 2019 levels, spurred by more clarity about the health situation, ongoing state of offices versus remote work, and support for both pre-planned and last-minute trips. This would represent more than four times the travel spend from the summer of 2021.

“While many road warriors are ready to return to a consistent travel schedule, ongoing health concerns and shifting workplace priorities will influence the future of corporate travel,” said Anthony Jackson, principal, Deloitte transactions and business analytics, US airlines leader.

“The changes adopted and lessons learned during the pandemic, combined with progress toward sustainability commitments, are creating a new normal for corporate travel. However, the importance of in-person interaction for business success is clear, creating opportunities for the airline industry to continue to attract and serve business travelers,” Jackson added.

The report is based on a survey of 150 US-based travel managers and executives with travel budget oversight fielded between May 28 and June 20, 2021, in addition to interviews with executives at US companies whose 2019 air spend averaged $123 million.