What Does the Future of Global Business Travel Look Like?

1 What Does the Future of Global Business Travel Look Like? A Slow Recovery – And a New Normal The world is beginning to return to work, and the unprecedented lockdown measures implemented by governments to slow the spread of the COVID-19 pandemic in March and April are being lifted. Yet it is clear that there will be no immediate return to normality: many businesses are likely to continue with large numbers of employees working from home. Moreover, one of the hallmarks of contemporary corporate life – business travel – remains in limbo, with the timing and pace of any recovery uncertain. The immediate impact of the pandemic has been dramatic. Citi Commercial Cards conducted a Global Business Travel Survey of professionals responsible for T&E programs at 125 major corporations in early May. It showed that 94% of respondents’ companies had a policy in place that prevented employees from traveling during the pandemic. Of those, 89% said the policy impacted both domestic and international travel, while 68% said all travel was limited at their company. The impact of this disruption on the global business travel sector is substantial. A survey by Global Business Travel Association estimates the sector will take a revenue hit of about $820 billion, with China accounting for nearly half of the losses. 1 Research by Skift suggests that the largest seven public online travel agencies will alone lose at least $11.5 billion in revenue this year due to the virus. The impact could even go higher, potentially resulting in as much as $20 billion in missed revenue. 2 The shape of recovery With business travel having almost ground to a halt for months, questions are inevitably being asked about whether it can bounce back. Certainly, the pace of recovery is expected to be slow. Respondents to Citi’s survey said their travel budget for 2020 will be 50% of that in 2019, and 49% were unsure when travel will resume in their organizations; 68% said they were uncertain when their organization would resume attendance at large events and conferences. It is important to recognize the scale of the shock many companies suffered earlier this year. Some had to repatriate travelers at short notice as international borders closed. Companies (and travelers) are likely to be cautious as a result of their recent experiences. Decisions about resuming business travel will therefore not be taken lightly: 47% of respondents to Citi’s survey said that the decision about whether to allow travel again will be made by the company’s CEO. Business travel has undergone unprecedented disruption during the COVID-19 pandemic. Recovery will take time, vary by country and be subject to reversals should infections increase again. Nevertheless, given the value it adds for corporates, business travel will return – but it is likely to be significantly different and some changes will be permanent. 1 https://uk.reuters.com/article/uk-health-coronavirus-business-travel/business-travel-sector-to-lose-820- billion-in-revenue-on-coronavirus-hit-industry-group-idUKKBN20Y0OF 2 https://research.skift.com/report/the-impact-of-covid-19-on-the-online-travel-industry/ Does your company have a policy in place that is preventing employees from traveling during the COVID-19 pandemic? 6% No 94% Yes If yes, does this policy impact both domestic and international travel? 89% Both International and Domestic 1% Domestic Only 5% International Only