Corporate travel is starting to recover, as coronavirus restrictions ease in many parts of the world, indicating the first signs of recovery for a pandemic-driven industry.
Hotels, airlines and travel companies are all reporting that there has been an increase in corporate discussions over the past few weeks, as executives are back on track for months of virtual meetings and video conferencing.
The recovery is fluctuating and is led by domestic markets where the easiest journey is, but the industry has nonetheless welcomed signs of pent-up demand.
“Where government restrictions have been removed, we see that demand is returning very strongly,” said Paul Abbott, CEO of American Express Global Business Travel, AmEx GBT.
Abbott said discussions of financial and professional service businesses have returned strongly, but the rise is being driven by small and medium-sized businesses, which ‘can only make decisions faster’ and face less bureaucratic obstacles.
Since vaccines were put into effect, recovery was fastest in the US, with international travel in Europe dampened due to restrictions.
However, international travel in Europe continues to rise by 2 percentage points per week and corporate bookings for domestic flights and hotels in countries such as France are increasing, with hotel bookings at 80 per cent of 2019 levels.
Hotel and air bookings in Spain and the North are around 50 percent of the 2019 levels, according to AmEx GBT data.
In the US, the opening is starting to fit in with Las Vegas hosting the World of Concrete, the first major event since the start of the pandemic in early June, and major US airlines, including America, have reported an increase in corporate customer bookings. .
Hotel groups, including Hyatt, Accor, Marriott International and InterContinental, have all shown the same trend.
Marriott said U.S. corporate demand in May was 50 percent from 2019 levels, while group bookings in Hyatt rose 55 percent in the first quarter of 2021 compared to the fourth quarter of 2020.
‘With the slow distribution of vaccines and many flights still suspended, the return of business travel in Europe is slower. . . we always knew that the other side of the pandemic would be uncomfortable and would differ from market to market, ”said Mark Hoplamazian, CEO of Hyatt.
Marriott noted that the demand for corporate travel in Europe is driven by the energy sector, particularly in Russia, where overall discussions for the oil and gas industry are close to 2019 levels.
Despite the initial signs of underlying business travel demand, it is still unclear how much will be permanently lost due to a pandemic overhang, the widespread use of software such as Zoom and pressure on companies from investors with ESG agendas to avoid unnecessary travel reduce.
Hotel companies have warned that corporate travel may not return to the levels ahead of Covid, while airlines, including British Airways, have focused on luring holidaymakers into their premium cabins to help offset the loss of corporate clients.
Bill Gates, co-founder of Microsoft, has suggested that more than 50 percent of business travel will go permanently, but many in the travel industry are very clumsy, saying executives want to be on track to meet customers and win new business once the pandemic is over.
“While the recreation segment will lead the recovery, we are encouraged by these early signs of returning business travel,” said Satya Anand, Marriott’s European president.