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The Critical Points: What does the future of business travel look like?

April 03, 2020
6 min read
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Each week in his column “The Critical Points,” TPG Loyalty and Engagement Editor Richard Kerr presents his opinion on a loyalty program, card product or recent news that he believes is overlooked, unsung or the result of groupthink taking mass opinion in a direction with which he doesn’t agree. His goal is not necessarily to convince you to agree with his position but rather to induce critical thought for each of the topics and positions he covers.

On April 1, the TSA screened 136,023 passengers at airport checkpoints nationwide. That is a 94% drop in passengers from the same date one year ago. This trend is likely to continue or even accelerate over the next few months. Airlines have cut capacity drastically as air travel demand is basically nonexistent, and hotels are either closed or at near empty occupancy. The traveling businessman and businesswoman are currently like a defunct, nostalgia-inducing character from old advertisements — a Joe Camel of the 90s or the Maytag Repairman of the 70s.

The lack of business travel has ripple effects across not only the travel industry ecosystem but the economy as a whole. I personally don't see any kind of significant business travel resuming until at least July — and that's in a best-case scenario. With both monstrous corporations and small businesses trying to adapt to a nearly 100% virtual world, what does the future of business travel look like?

Permanent workplace changes

By now, many have recognized how much work previously done in person can be accomplished remotely. Thousands of offices have transformed practically overnight into remote only workspaces (including us here at The Points Guy). Microsoft Teams and Zoom dominate the daily grind, while Slack — already plenty popular before COVID-19 — and iMessage keep up the water-cooler chat.

The effectiveness of an all-remote workforce for traditional companies has yet to be truly measured, but what some thought would be ineffective or impossible became a necessity — and much is still being done. This will lead to permanent shifts in the workplace which will (naturally) impact the need to travel.

I think we will see the following:

  • Smaller physical offices that save on leases and other overhead required to run a brick-and-mortar location.
  • Less stringency on potential hires and talent needing to be located in a specific city.
  • Leaner staffs once positions are noticed as being redundant, idle or unnecessary to the essential functions of a business.

Permanent drop in business travel needs

With the shifts not only in corporate mindset but also in workplace logistics, I see business travel dipping significantly for the following reasons:

  • With nearly zero travel expenses over the course of these months, the savings will likely not go unnoticed. In a time when many businesses will be looking for cost savings, they may consider the work that was accomplished remotely during quarantine and decide to cut back on travel expenses permanently.
  • Meetings that previously "required" an in-person presence will continue to be remote.
  • There will be a stigma around large gatherings like conferences and all-employee meetings for an indeterminate amount of time.

Then there's the general mindset of the individual traveler. Who wants to shuffle into an enclosed metal tube or train anytime in the near future to deal with three inches of leg room while literally rubbing shoulders with your seat mate? I believe that the psychological impact will be undeniable on the general business traveler.

Airlines have already begun to see this (likely permanent) drop in demand. United, for one, warned employees the airline and workforce will likely have to be smaller than it was pre-pandemic.

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Photo courtesy of United Airlines
Photo courtesy of United Airlines

Product shifts

Looking past the volume and necessity of travel, the products companies offer will also change. I see scenarios where everything from airplane seat pitch, the hotel experience, loyalty programs and travel incentives differ from what they were in February of this year.

  • How do airlines create a passenger experience that either gives people the illusion of cleanliness or actually provides a healthier inflight experience?
  • How does a hotel give customers the confidence their rooms have been properly sanitized?
  • How do loyalty programs leave the current position of being another revenue-generating arm of the business and return to the purpose of their existence: rewarding people for being loyal to their brand?
  • Which hotels, airlines, online travel agencies, cruise lines and travel products are unable to weather the economy and no longer exist?

The business traveler's experience will likely be a different one than they are used to — though whether it will be more comfortable or less enjoyable is unknown.

RELATED: 5 ways the coronavirus will change the future of travel

First-mover advantage

I was talking to the TPG Lounge moderators about what they foresaw with business travel when David O. brought up a good point. While the majority of companies will be trigger-shy on putting employees back on the road, the ones who do move first and travel aggressively may have a significant strategic advantage. By jumping back in, these organizations project confidence, giving potential partners and investors the clear message that they are open for business. The relationships they build in the immediate aftermath of the crisis could pay notable dividends — be it new business, expanded market share or a rejuvenation of existing accounts.

If you find yourself in a position where you are comfortable hitting the road after the crisis has passed, it could be a wise move.

Bottom line

There's a human aspect to what happens with business travel that can't yet be known. Long-time road warriors may be sitting at home and recognizing how tired they'd become from their respective travel rhythms. Many of us will likely experience an aversion to groups that will make public gatherings or tight quarters intolerable. The mental health effects of these months will live on for years and is not being adequately addressed or discussed.

While there are a lot of things that can be done remotely, I am a firm believer that there's no replacement for the in-person element of a business relationship. The positive effects of a meal, a social event or another live function can't be fully replaced by technology, and that means business travel will always be necessary to some degree. What level of travel will be required, and what does that experience look like in 2021? It's currently anyone's guess.

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