Companies are saving big in the lack of business travel costs – as demonstrated by Amazon’s announcement that it has saved almost $1bn on travel expenses in 2020. Such significant savings is leading to questions on just how long it will take for business travel to recover as the pandemic is brought under control.
Many companies that heavily utilized corporate travel will be in no rush to resume pre-pandemic levels in order to save on costs and effectively streamline in the short-to-medium-term, says GlobalData, a leading data and analytics company.
Ralph Hollister, Travel & Tourism Analyst at GlobalData, comments: “Without the COVID-19 pandemic, the vast majority of companies would have not realized the amount of capital that could be saved from stopping business travel. When considered alongside the fact that video conferencing technology has served as a valid substitute for face-to-face meetings, recovering businesses are not being given many incentives to pick back up where they left off.”
According to a GlobalData poll, 52% of business owners and executives would not send their employees to attend an overseas MICE event in the next 12 months.
Hollister adds: “The reluctance from business owners/executives will be a mix of wanting to save costs following the financial burden caused by the pandemic, and wanting to maintain organizational commitment from employees – workers will likely appreciate the company they work for if it shows that it cares about employee welfare.”
A vast reduction in airline flights typically carrying business passengers also helps companies meet sustainability goals, which are becoming increasingly important. This may be another reason why business travel may not reach the pre-pandemic levels.
Hollister concludes: “The CFO of Amazon noted that internal travel expenses will likely resume, but may not rise to the same level that they reached in the past. This mindset may be emulated by many multi-national companies. When companies and their employees are prepared to return to international business trips, demand will be likely return in phases. Small meetings and essential business operations will return first, while large-scale exhibitions and international trade fairs will be likely to be the last to return.”