The return of business travel: A look at the trends
Consumers are coping with sold-out flights and scarce lodging options despite dramatic price increases across the board. The return of business travelers and their corporate expense accounts may be one of the causes of this major market change. However, to what extent has business travel returned?
"We are seeing the highest levels of business travel since the pandemic began," according to Nick Vournakis, executive vice president for the international business travel management company CWT. He told The Points Guy that "the strength of pent-up demand for business travel is clear." American Airlines' most recent earnings call reported that its business travel has reached 80% of 2019 levels in the first quarter of 2022. The company predicts it will be "90% recovered" by midyear. United Airlines' CEO Scott Kirby said on his company's call that "business travel is rapidly returning, but it's still not fully recovered." A representative on Delta Air Lines' earning call said its "business travel volumes reached the highest post-pandemic levels we've seen."
TPG analyzed some recent numbers and interviewed industry associations, convention bureaus and business travelers to gauge the return of business travel in the U.S.
Positive changes for business travel
Diana Casanova, a Ph.D. candidate who attended the recent American Educational Research Association conference, was excited to return to the conference for the first time since 2019. "I loved being back in person! Connecting with friends and colleagues brought me so much joy," she said. The conference's 9,500 attendees filled 40% of the San Diego Convention Center; they also reserved meeting rooms in two nearby hotels, as well as accommodations across the city.
The convention trade is making a comeback in Las Vegas as well. According to the Las Vegas Convention and Visitors Authority, "business travel is returning to full force, with the number of 2022 trade shows on the books at the Las Vegas Convention Center set to surpass pre-pandemic numbers." In-person meetings and events began to ramp up in spring 2021 and since then, "the LVCC has hosted 77 events with an estimated attendance of nearly 1.2 million, showcasing confidence by trade show organizers that meetings can be held safely and efficiently." The LVCVA reported March convention attendance at 494,000 people — just about 10% below March 2019 levels. Still, this number is less than the city's 636,000-person average conference attendance for the month.
The Global Business Travel Association recently announced a surge in business travel demand, based on the April results of its Business Travel Recovery poll. The GBTA reported that 86% of global companies that responded to the survey now allow nonessential business travel for employees, up from 73% in February. Nearly 75% of companies said they now allow international travel, while just half allowed global trips the month prior. Even for those companies that have suspended business travel, 75% said they plan to resume domestic travel within the next three months. The survey also revealed that 88% of business travel suppliers (such as corporate travel agencies) reported increased bookings in the prior month.
Who are these business travelers hitting the road again? TPG readers shared some of their experiences. Norman Moy, who works in mergers and acquisitions and IT infrastructure projects, says he is "full-on traveling for work again," and expects to be "on the road more than usual this year to catch up with the backlog of projects from the last two years." Becca Gets, a technology training and project manager, said she expects to be "on the road 16 of the next 18 weeks." She's still doing Zoom calls, but now they're "usually from the Centurion lounge."
The recovery is happening all over the country. "Miami Beach and the Convention Center are seeing a strong return in business travel and meetings," said Mohan Koka, general manager of Miami's Kimpton Surfcomber Hotel. "Just this year many major citywide conferences positively impacted our property occupancy levels. We're experiencing demand in groups that surpass 2019 levels. With all this in mind, there's no doubt that the meetings industry and business travel are making a grand comeback in Miami Beach."
Rachel Sacco, president and CEO of Experience Scottsdale, said the Arizona destination that's long been popular for meetings and events is optimistic about business travel there. She told TPG that Scottsdale's "leads for future bookings have surpassed pre-pandemic levels, and we feel confident that meetings business will continue to grow in the months ahead."
The U.S. Travel Association seconds this optimism. In April, the group reported that 88% of surveyed business travelers expect to take at least one trip in the next six months. According to the group's Business Travel Tracker report — which is conducted with the Tourism Economics group — the frequency of business trips is nearly reaching pre-pandemic levels. It recorded 1.6 trips per month for regular travelers versus 1.7 per month in 2019.
Related: Will working at home be a boon for business travel?
Business travel still lagging pre-pandemic levels
Although industry surveys and convention bookings point to some bright spots in the business travel recovery, other data shows there is still a way to go to match pre-pandemic levels. The GBTA survey of corporate travel agencies revealed that bookings, while rising, are still running at just 56% of 2019 totals. The Las Vegas convention business has grown dramatically since the pandemic shutdown, but monthly attendee figures continue to lag more than 20% below normal. In Scottsdale, current bookings are a "significant improvement" over those from 2021, but they are still below pre-pandemic levels.
San Diego's AERA conference, while considered a success by organizers and attendees, still had a significant online component for those uncomfortable or unable to make the trip due to COVID-19 concerns. In-person attendance accounted for 63% of the conference's average pre-pandemic level of 15,000 attendees. Julie Coker, president and CEO of the San Diego Tourism Authority, said in a statement that while "meetings and conventions are continuing to rebound," the group doesn't expect the destination to fully recover to pre-pandemic levels until 2024.
About a quarter of the readers who responded to an informal TPG poll said their business travel plans were still on hold, or a fraction of what they used to be. "I used to be a road warrior for my two businesses and neither has returned to travel," Marina Nitze, who works in IT consulting, said. Dan Benning, who works for a large health care organization, said most of his meetings take place on Zoom, but he speculated that "it has more to do with optics than safety." Most TPG readers agreed employees have been returning to a limited but growing amount of business travel.
The individual traveler notes seem to match trends at some destinations. "We're still pacing about 30% behind 2019 in terms of Economic Impact (of the convention trade) and 55% behind 2019 for attendees," Visit Anaheim reported to TPG. Visit Anaheim President and CEO Jay Burress said the rebound of the business trade is a work in progress with better times ahead. "Anaheim's recovery from the past two years is in motion, especially with conventions coming back," he said. "In March, Anaheim successfully hosted the largest B2B trade show in the country since the pandemic and in June, the city will see the return of NAMM, which is the largest convention annually for the destination in terms of economic impact."
The USTA Business Travel Tracker report determined the Business Travel Index (a measure of the overall spending and activity) was at 64% of pre-pandemic levels for the first quarter of 2022. This is about a 9% drop from the prior quarter in 2021. Some business travelers said they were unsure about traveling for a number of reasons, including a lack of scheduled meetings or conferences, company restrictions on travel, the substitute of video conferencing and overall health concerns.
The USTA travel index is optimistic and expects to see 77% of pre-pandemic business travel levels for the second quarter of 2022. However, external factors, such as staffing issues and inflation, may negatively affect the industry going forward. TPG will continue to monitor the situation and report on all the latest developments in our newsletter and regular news reporting.
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