How The Travel Ban Is Impacting Business Travel

Business travel is the lifeblood of airlines and hotels. For many travel providers, leisure travel is an add on with the real sweet spot being corporate travel. Business travelers tend to travel more often, book at the last minute, purchase premium cabin airfares, stay in nicer hotels and spend more money entertaining, on roaming charges and ground transportation. They keep the travel industry going. So how is the travel ban impacting business travel? In a word… BIGLY.

To understand the impact the current situation is having on corporate travel, all you have to do is read the news. Delta, the world’s largest airline has announced capacity cuts by at least 40%, though we hear it’ll be much more. British Airway’s CEO Alex Cruz said that they were facing “a crisis of global proportions like no other”. And most hotel chains have relaxed or suspended all cancellation or changes fees through to the end of April to try to take some uncertainty out of travel. 

We can look to China as an example of how dark the picture is now and what the impact will be this month for US and European travel brands. The International Air Transport Association reported that year-over-year international passenger traffic on Chinese airlines dropped by more than 50% in February, while domestic passenger traffic crashed by nearly to 75%. And we know that Hilton alone temporarily closed 150 hotels in China. Our contacts in the industry say to expect deeper cuts for US and European airlines and hotel closures across the board.

So things are looking bleak. The travel ban is impacting business travel to Asia, Europe and domestically across North America. Basically no one can or will travel these days. And once the Coronavirus passes and all travel are lifted, it wills still take a lot of convincing to coax business and leisure travelers onto planes and into hotels for conferences.

This is a problem which travel providers won’t easily get past and the early optimism that the industry will return to normal by the third quarter of this year is starting to look far fetched. Stay tuned for more urgent COVID-19 and travel coverage.

 

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