Monday, January 17, 2022

Business travel resurgence expected as companies grow tired of Zoom, but omicron option complicates prospects

Many road workers’ suitcases and passports have been gathering dust after the COVID-19 pandemic halted business travel.

This is not the case for Chicago-based Devbridge, which hosted an event in Lithuania earlier this year and brought teams from Toronto, London and Lithuania to its Chicago office last month to test new products with clients.

The tech consulting firm’s 650 employees work in different offices around the world and spend about 20% of their time on the road before travel restrictions were introduced in early 2020.

“The moment they were canceled, we had teams flying and visiting customers,” said co-founder and president Aurimas Adomavičius, who expects the company to eventually return to “business as usual” when it comes to employee travel. …

“Personal collaboration for high performing teams is optional for us. This is necessary, ”said Adomavičius.

Corporate travel has been hit particularly hard during the pandemic as people plan their vacations faster than business trips, especially as employers are delaying opening offices due to a new wave of infections this fall.

The introduction of a new high data rate option – omicron – has added uncertainty about the timing of a wider return to business travel. Just last week, the United States introduced new restrictions on entry from South Africa and seven other countries in the region.

Travel companies say they are confident that the road warriors will eventually return, but that doesn’t mean that each company’s employees will hit the road as often as they used to. While companies like Devbridge say they want to return to their wanderings around the world, others have realized they don’t need to be on the road that much when they are stuck at home during the pandemic.

“It’s not just an automatic hopping on a plane for an hour-long meeting, it’s proactively working with clients to say, ‘How can we best use our time together? “Said Stephanie Nerlich, CEO of Havas Creative Network North America.

More on the COVID-19 pandemic

In the first year of the pandemic, the ad agency, which employs about 350 employees in Chicago, hardly traveled because customers didn’t ask for it, Nerlich said. Some started asking for personal presentations again over the summer, and she still thinks this is the best way to mend a relationship. But she is skeptical that employees will be on the road as often as they used to.

Havas and her clients are trying to be more mindful of when travel is needed, she says, by replacing a few short visits with a longer, more productive session, for example. Restricting travel lowers costs and helps the company meet its carbon footprint by 2025.

Bounteous, a Chicago-based consultancy that helps brands create online experiences, also plans to be “more strategic” with travel in the future, said chief personnel officer Leah Weyandt.

Before the pandemic, some of Bountaeus’ clients only wanted to do business in person. Everyone is now used to Zoom and other virtual work tools.

“They no longer see face-to-face contact as the only way to complete a task,” Weyandt said.

However, some of the in-depth work and confidence building are best done in person, she said. When Bountaeus bought Atlanta-based sales and service agency FortyFour last December, a lack of personal time made the acquisition “the most challenging to date,” she said.

The approaches differ from company to company. According to the November report, about 38% of business travelers surveyed by Bank of America thought they would travel significantly less than they did before the pandemic, and 31% disagreed, according to a November report.

Even as some companies say they plan to ditch business travel, airline executives are optimistic about the growth in corporate travel next year, answering phone calls about their October earnings.

“We were told … that we really should expect an increase in business activity next year with a lot of pent-up demand. We have many clients who need to get back on the road, and they really want it, – said then the commercial director of United Airlines, Andrew Nocella.

At American Airlines, nearly two-thirds of corporate customers make at least some important international business travel, and the airline expects business travel revenues to return to 2019 levels by the end of 2022, President Robert Isom said during a meeting with financial results.

According to the November news release, the World Business Travel Association has been a little more cautious, forecasting a 38% rise in global business travel spending next year, with a full return to pre-pandemic spending by 2024.

It is unclear how omicron will affect these predictions. In a statement released on Tuesday, the World Business Travel Association urged governments to avoid border closures and instead focus on assessing the risks of individual travelers.

Previous options resulted in a drop in bookings, followed by growth “when the surge dies down,” said Helan Becker, an airline analyst with financial services firm Cowen.

“In our opinion, this pandemic will be with us for the foreseeable future, and in this vein, we believe that people will in any case begin to ignore the risks and travel,” she wrote.

However, business travel recovers more slowly than leisure travel. If omicron causes a widespread delay in opening offices, it could be a setback, but it remains to be seen how companies will react, said JP Gownder, vice president and chief analyst at research and consulting firm Forrester.

Some may push back official discoveries, waiting for more information about the risks associated with the omicron, while others may remain open on a voluntary basis or take additional precautions such as vaccination requirements, he said.

“Everyone is in COVID-19 risk management mode,” he said.

In the long term, even if the growing usability of telecommuting tools prompts some companies to plan fewer travel trips, other pandemic changes in the workplace could create new travel patterns, said Dave Harvey, vice president of Southwest Business. A company that is more open to telecommuting may still require telecommuters to fly into the office periodically, he said.

Southwest Airlines estimates it only accepts half of business travelers in 2019, but the airline is working to attract more corporate passengers during the pandemic, Harvey said.

The Southwest has a long reputation as a tourist destination, and its limited network of international destinations and planes with no business class seats mean it won’t suit every road warrior.

But according to Harvey, most business travelers don’t rest in seats with improved seating or fly to overseas business centers. They might like Southwest’s free checked baggage and free flight changes, a perk that other major carriers have enjoyed since. Those who prefer to avoid small regional planes may also be interested in the Southwest, he said.

Business travelers also value reliable flight schedules, which airlines including Southwest have sometimes struggled with as travel recovered this fall. Harvey said Southwest Airlines flies fewer flights on holidays to reduce the likelihood of disruptions.

Business travelers also return to hotels. Hyatt’s business and group travel revenue in the last quarter was nearly 40% higher than in the previous quarter, said Asad Ahmed, Hyatt’s senior vice president of commercial services for the Americas.

Many corporate clients at the Chicago-based Hyatt say they plan to make a more active return to travel in early 2022, Ahmed said. However, the company expects to host more hybrid events in the future with both in-person and remote participants as they are more inclusive.

“People can’t always travel for a variety of reasons, so hybrid formats are a great option for planners to dramatically expand the reach of their meetings and attract more attendees than ever before,” he said.

Hyatt’s own employees are also increasingly traveling, as are the employees of BMO Financial Group.

At the start of the pandemic, the bank’s clients realized it was relying more and more on virtual instruments, but with the rise in vaccination rates, so did the number of face-to-face meetings and corporate travel, said David Kasper, CEO of BMO Financial Group in the United States. email.

“Banking is a business of relationships and, frankly, nothing can replace the value of personal, personal communication,” he said.

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