A stunning new report says that business travel may never be the same as companies adapt to life after the pandemic and business travelers look to technology to replace their nights on the road.
Business travel is likely to stay depressed as the airline industry begins its recovery from the pandemic. That’s the conclusion of a new report based upon a first-ever approach of assessing business travel by trip purpose, rather than industry category. The Journey Ahead: How the Pandemic and Technology Will Change Airline Business Travel is sponsored by global travel tech provider CarTrawler. The IdeaWorksCompany analysis estimates the frequency of different types of airline trips, predicts how that will change, and offers insights into how airlines can maximize new revenue in the future.
Key findings from the report:
- Analysis reveals a potential overall loss of airline business trips ranging from a low of 19% to a high of 36%.
- Travel for “sales activity and securing clients” is the largest category of business air travel (25% of the total); it’s projected to show a modest loss ranging from zero up to 20%.
- Intra-company meetings comprise 20% of all business air trips, and are projected to decrease up to 60%.
- Business travel booked by US corporate travel agents had a 95% year-over-year plunge in transaction value at the beginning of the pandemic in March 2020; this slightly improved to an 85% drop by November 2020.
- Airlines can recover the revenue loss by:
- Enhancing leisure travel retail efforts;
- Boosting ancillary revenue
- Reducing lie-flat seat capacity
- Adding premium economy seating.
Aileen McCormack, Chief Commercial Officer at CarTrawler, said: “With huge flux in the business air travel segment, and indeed the sector as a whole, it is clear that airlines must adapt to meet consumers’ needs otherwise they will be left behind by their competitors. The good news is that an innovative plan encompassing an added focus on leisure travel, ancillary revenue, and seating strategy will offset airlines’ business travel losses and ensure that carriers are well placed to emerge stronger and leaner once the pandemic is over.”