With vaccination programs ramping up globally, including the planned distribution of 150 million doses across the US, travelers, airlines and hotels are looking forward to a better year ahead. While the outlook for business and leisure travel this year remains uncertain as the industry continues to struggle with the fallout from the global coronavirus pandemic, remote work is opening doors to new travel opportunities, and recent research has found that business travel has been linked to economic growth.
Before the pandemic, business travel was booming, generating $1.3 billion annually. Experts expect it to take a few years for the industry to reach those financial highs again — in a recent SmartBrief poll of business travelers, 42% of respondents said they are not likely to travel this year. At the same time, business travel has been an important economic driver globally.
A recent Oxford Economics study found that $12.50 of additional revenue is generated from every dollar spent on business travel. Another study from Harvard’s Growth Lab confirmed social interaction via business travel is an important part of the economic engine.
“We’ve been puzzled by the fact that business travel has been growing faster than world GDP, despite the widespread adoption of alternatives like Skype, FaceTime, email, etc.,” said researchers at the Practice of International Political Economy at Harvard Kennedy School. “We posited that maybe there is a difference between moving information and moving brains. We obviously never imagined a complete shutdown of business travel, but the [findings published in the] paper allows us to delve into the consequences.”
New travel & hospitality campaigns target remote workers
Marriott is addressing the pandemic’s impact on business travel by targeting a group of consumers who blend work travel with fun. The “bleisure” focus is evident in its “Work Anywhere” promotion, which allows travelers to book hotel rooms for single days, as well as in its strategy of catering to working families with children’s activities and semi-private work areas.
InterContinental Hotels Group also expects to see a shift in travel since people are sticking to remote work. Hotels could benefit from this switch, CEO Keith Barr said, as people can effectively work while still staying in hotel rooms.
“We’re moving forward with rolling it out because we think our customers need the information now,” said Kelly Knowlen, executive director of sales engagement and special events at Hilton. “They need the resources and the help now so, even while they’re planning, it might be for future events.”
For hotels, a significant number of travelers are interested in the most aggressive health and safety precautions. Hotels are expected to continue to promote their emphasis on health and safety., Marriott, which uses electrostatic sprayers, will continue to double down on safety precautions.
Technology has an important role to play in bringing back travel. According to a survey by Cenuswide, four in five travelers would be confident to travel if there were more contactless payments and mobile boarding, as well as more rapid-testing for COVID-19. Several airports have already taken action there. Likewise, SITA’s ‘Air Transport IT Insights 2020’ report describes increased investment in automated passenger processing with touchless and mobile services, with 64% of airports planning to roll out biometric gates for self-boarding by 2023.
Meanwhile, observers say digital health passports will become a staple of international travel, with the European Union already debating how to facilitate their use across borders. The passports, such as American Airlines’ VeriFLY, which will also be used by Alaska Airlines, allow passengers to upload and show proof of testing and vaccinations.
Travel managers say they are more open to do business with hotel chains that comply with the upcoming global risk benchmarking standard currently under development by the International Organization for Standardization. Coming out this summer, it will help companies avoid potential litigation.
“Having a comfortable environment and good food is one thing, but if a threat emerges I’d like to know the staff know what to do,” said assessor Nick Hawkins, a commercial director who audits hotels, such as the Strand Palace Hotel in London. To maintain safety, hotels are on track to spend up to $9 billion on new hygiene protocols.
With the new global risk benchmarking standard, third parties are expected to help hotels maintain health and safety, and travel managers want more outside assessments made.
“There won’t be these self certifications, there’ll be an international standard against which we want to ensure those hotels or airlines are abiding with,” said Duncan Edwards, global head of demand and supply at multinational car dealership Inchcape. “When tenders are conducted in the future, the questions you’re asking, and the weighting, will clearly change. Maybe the duty of care services will be further at the top of the list, because it’s imperative the company ensures its travelers are going to be safe. The huge benefit of this is going to be restoring confidence in corporate travel.”