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Almost every corporate giants, from Google to Goldman Sachs, are bringing workers back to the office, but the return to business travel is shaping up to be slower.
Online domestic flight bookings totaled $ 5.1 billion in May, according to data released Monday by Adobe Analytics. That’s 4% less than in April and 20% less than the same month two years ago – and the big culprit is a stubborn lack of business travel, the company said.
According to the company, only 11% of workers plan to travel for business in the next six months, and 29% of those polled still don’t feel safe.
“An increase in vaccinations and consumer confidence have triggered pent-up demand, but the lack of business travel is starting to slow the return,” the data company said. “Lack of business travel (as companies take a cautious approach to reopening) and continued consumer reluctance are extending the road to recovery.”
According to the Global Business Travel Association, this year spending on business travel will increase by 21% in 2021, especially towards the end of the year, as vaccinations become widespread. But the group doesn’t expect a full recovery until 2025.
Business travel may not make a full comeback until 2025, according to an industry group Getty Images
Financial firms have been the biggest proponents of the return to the office, but even as they seek to bring employees back to headquarters, they have yet to fully pick up on travel-heavy initiatives such as roadshows of initial public offerings. Likewise, most investor relations conferences and meetings, which previously represented a significant amount of travel, remain online.
Sectors like consulting and law that required a lot of travel aren’t even close to where they were before the coronavirus shut down travel, experts say.
Some companies that held face-to-face board meetings last quarter have returned to Zoom this quarter, the senior associate dean of Jeffrey Sonnenfeld Yale School of Management told The Post. There is a cost saving, and in the future, some companies may choose to only do half of their meetings in person.
Amazon and Google each saved more than $ 1 billion in travel costs last year as the pandemic halted business travel. Saving that kind of money will be hard to give up. But others believe that once some companies start their business travel, it will put pressure on others to get back on the road.
They’ll save money on travel until they start losing business, founder Thomas Hayes, chairman and managing member of Great Hill Capital, LLC, told The Post. No one in their right mind wants to participate in a Zoom call. They want to eat a steak.
Yale professor Jeffrey Sonnenfeld told the Post that many companies still choose Zoom over travel. Getty Images
Much of the decision to get back on the road will depend on what the competition does. And as some people resume their trips, it could create an element of peer pressure or FOMO (fear of missing an outing) that forces competitors to get on a plane.
As The Post reported on Friday, companies like Morgan Stanley are pushing clients and investors to resume meetings and asking them about their willingness to attend conferences and travel both nationally and internationally.
JPMorgan in particular pushed the bankers to take again the road. Speaking at the WSJ CEO Council in May, Jamie Dimon said, “There are a bunch of clients who have done business with someone else because other guys’ bankers came and ours didn’t. not done. OK, well, that’s a lesson.
Whether it’s a flywheel or a catalytic effect, ambitious people will start traveling in greater numbers, Sonnenfeld adds. Proximity matters.
Many companies prioritize a full return to the office and always weigh the pros and cons of sending employees on the move internally. Companies like SoftBank and BlackRock have yet to make a decision on this.
Still, others believe it will be a gradual transition back to life before the coronavirus.
There’s a whole ecosystem, Harlan Peltz, founder and executive co-chairman of iBorrow, told The Post. You cannot travel if there is no one to meet and this will have an impact on business travel.
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