A Bloomberg article this week spelled doom and gloom for business travel but it’s wrong and here’s why.
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“CEOs Are Dooming Business Travel – Maybe For Good”
The latest in a long line of articles about business travel in a post-pandemic world comes to us from Bloomberg, ‘Forever Changed’: CEOs Are Dooming Business Travel — Maybe for Good. In the latest breathless piece, Bloomberg surveyed 45 companies and 84% said they “plan to spend less” on travel going forward.
A CEO for a paint manufacturer in Europe said this,
“Trips to drum up business could drop by a third, and internal meetings by even more,” he said in an interview. “It’s a good thing for our wallets and helps our sustainability targets. Our customers have had a year of training, so it’s not a social no-no anymore to just reach out by video… There’s an enormous efficiency element.”
The same article found this:
“A Bloomberg survey of 45 large businesses in the U.S., Europe and Asia shows that 84% plan to spend less on travel post-pandemic. A majority of the respondents cutting travel budgets see reductions of between 20% and 40%, with about two in three slashing both internal and external in-person meetings. The ease and efficiency of virtual software, cost savings and lower carbon emissions were the primary reasons cited for the cutbacks. According to the Global Business Travel Association, spending on corporate trips could slide to as low as $1.24 trillion by 2024 from a pre-pandemic peak in 2019 of $1.43 trillion.”
To suggest that business travel won’t be back or will never be the same using those same numbers only means a reduction of 13% of pre-pandemic levels. That’s hardly a radical shift in corporate travel.
People Are Over Zoom
It’s true that Zoom meetings are more cost-effective and efficient than in-person meetings. However, the wear and tear on traveling businesspeople crisscrossing the globe gave way to a new type of fatigue: Zoom fatigue. Stanford began studying the issue and found additional issues, “There’s a growing research now that says when people are moving, they’re performing better cognitively,” Bailenson said. Even Zoom’s Chief Executive Officer is over Zoom meetings.
One example in the Bloomberg piece was an employee examining plants across the globe which can now be done virtually. Anyone who has inspected another location knows that there are an awful lot of aspects that are only seen when you visit face-to-face. You don’t notice the stack of rejected products behind the building because no one walks the camera to the trash bins. You can’t see the despondency of employees when they walk around the facility, it doesn’t come through in a 40-minute webcam exchange.
Personal Connection Matters
When I’m on business trips, especially a sales meeting, there are other factors that accompany the meeting. For example, I almost exclusively schedule meetings close to a mealtime so there’s a natural continuation in an alternative setting. In a high-rise conference room, it might be all about the metrics, numbers, and deliverables but when we go for lunch and there’s one breadbasket, we have to share in a more meaningful way.
You need the non-business side to let others see you as a person with kids that struggle in tee-ball (not my kid, she’s a champ – this is a general statement.) Customers, vendors, and partners need to see the human aspect. That doesn’t get covered during Zoom meetings.
I have yet to be in a virtual meeting where someone has revealed something truly personal. We need to see and exchange with people to truly relate. The nuances of someone sitting back with their arms folded doesn’t come across in a Zoom call because they don’t do that, but it doesn’t mean everyone is pleased or is expressing their point-of-view.
Virtual Is All Business, Annoying When It’s Not
When I visit a customer on the road, that time is completely devoted to them. But when I’m on Zoom at home or even in an office, that’s not the same. This is an hour block where the rest of my life surrounds me. There are distractions that include family, or co-workers, or my next meeting that occupy my mind. I’m not really engaged in the same capacity.
Some have tried to carry on the small talk that starts most in-person meetings but that is infinitely more difficult in a Zoom without feeling contrived. Personally, I also feel like I want to dedicate as little time as possible to those meetings. I don’t want to catch up on how my community is dealing with COVID or the hurricane or the ball game when I can instead get back to other pressing work.
Some companies have incorporated happy hours into their end-of-the-day Zoom calls. It all feels so disingenuous when compared with in-person alternatives and those get a pass from me.
What do you think? Is business travel changing drastically within the United States or globally? Or is this all much ado about nothing?
I am happy to read someone who talks about real life.
Digital & virtual life do not make the all life, even just for work purposes.
Thanks Kyle for this post.
Agree 110% about Zoom fatigue-cannot wait for the day it goes away forever!!
Interesting take. I don’t think being “over zoom” will necessarily mean people go back to flying. Your 2nd and 3rd point about the personal connection & the mentality people have over Zoom calls is something I have considered. I think some of the reasoning for the 3rd point you brought up is because when flying onsite;
– There is a very good chance you will be taking them out to dinner
– There is a very good chance you will be taking them to a nice dinner
– There is a very good chance you will be taking them out for extra curricular activities (sporting events, top golf, roof top bars, uh…..other things)
That might not be entirely the reason why people behave so differently in person; nothing in Zoom comes close to replacing spending hundreds of dollars on taking people out. I will counter with some ideas on why business travel will take years to return;
– Expense reports. Who has missed filling out expense reports? No one. The process has gotten better, but different companies have different processes – some of which are still extremely clunky.
– Air travel has never been worse. Fights in the sky, riots at the gate, less seat padding, smaller seat width, less pitch in seats; this is just ridiculous, and is less of a fun experience, and more of a test of your patience and temperament
– Air travel has never been worse 2x. Ultra low cost carriers pushing the big 3 out of markets, travel booking systems flagging itineraries for not picking the low cost carriers due to their ultra-cheap pricing, erosion of basic-benefits like checked luggage (sure…if you could just….buy reward credit cards that offer this, you could get it for free. But your employer isn’t paying for your credit card fees)
– Air travel has never been worse 3x. Devaluation of miles and hotel points has left them worth “practically nothing” (until they aren’t). Who would have ever thought we would see promotions permitting people to earn as much as 64 points per dollar spent; and the points still be laughably useless? Regional jets are being removed across the country, and frequency of flights at regional airports is decreasing as a result. Not only does that limit your options, but it forces travelers to take less convenient flights – because that is all there is to pick from.
– It was never glamorous. It was okay, but you weren’t exactly staying at the Four Seasons, eating at Michelin starred restaurants, and spending the whole day playing golf on a $500 course. Now it is really not glamorous; who wants to fly and watch a poor flight attendant get punched in the face for trying to do their job?
– The workforce is spread out. When I visit an office, even if part of the team agrees to travel onsite the same week; more than half of the team is still remote and not in the office. As a result; even if I travel onsite, I am still joining Zoom meetings all day. So what is the point?
– The inconvenience. Who wants to wake up at 4:25 AM to get to the gate by 5:35 AM for a regional flight to O’Hare in the middle of winter; only to find the flight delayed 2 hours before being cancelled due to weather (not staff shortage; because that could result in compensation being given to flyers)? Who wants to stay in another crappy Sheraton or Marriott and eat more fast food? Who wants to wake up early to get to the Starbucks, deal with rush hour traffic in a city that isn’t your own, deal with the security guards & getting approved to enter a secure lot, then walk 1/2 a mile to deal with security again – and having to procure your temporary contractor badge. You’ve spent 2 hours doing nothing but trying to work; and you haven’t even sat down at a desk, or gave your presentation. Who wants to get woken up in the middle of the night by another fire alarm? Who wants to get woken up in the middle of the night with such frequency; that you don’t even evacuate your hotel room anymore, because you assume it is another prank?
This combination of things makes business travel ultimately more annoying than rewarding. Zoom fatigue and frustrations are real; but people lack the skills to effectively use online commutation platforms and tools. People may get pushed over the edge with these tools and insist they travel back onsite; but it doesn’t take much to make them realize that they are putting themselves through A LOT, just to not do the same thing remotely.
I haven’t even brought covid-19 specific reasons for why people won’t be traveling soon; but you can imagine how those only add to this list (lack of babysitters, lack of pet sitters, not comfortable traveling when 35% of society refuses to believe we’re in a pandemic, not wanting to risk covid-19 infection for free chicken tenders and worthless air miles, etc).
This may seem pessimistic, but it is worth while to remind ourselves just how bleh the experience is. If you haven’t fulfilled your desire to travel, or be a jet setter, or just live on the company dollar; I can see those being anxious to get back out. But for the vast majority of us; it was great to hit pause on travel, and reflect on what is truly important in life. I guarantee – what is most important in life is not that bulkhead seat you wish was available
Longest comments post ever, Matt?
Some fun Stats…
Kyle’s word count including quotes was 811
Ryan’s word count was 924.
You make some good points, Ryan. Travel is much less enjoyable than it was years ago. But I think this is an opportunity, not a problem. The airlines and hotels that can figure out how to differentiate themselves and offer a better product will flourish while those racing to the bottom will end up failing. This is a wake up call to the industry. Some will fail. Others will triumph.
Great post. You nailed it.
Companies and individuals have learned during the pandemic, that many many meetings, trainings, and other situations can be done virtually at far less time and cost than jumping on a plane. I often was summoned by a client to be at meetings in Singapore or Zurich, or wherever, when those meetings could and should have been done virtually. In other cases, yes… the in person selling/relationship building that you shared may be appropriate in some cases too. The point is…. That business travel has indeed changed forever…we don’t always have to get on a plane and meet in person, and we don’t always need to meet virtually. If you cannot understand that businesses have figured out that this saves so much money and resources, and that it will permanently impact business travel, I would suggest you may letting wishful thinking win.
The movie Up In The Air called this one a long time ago. It’s not the same experience however….for the near future there will be much less business travel as the risk level to employers is too high for both the employee health issue but also to local and international covid travel restrictions and optics. Business travel will come mostly back over the long term but for now, it will be bad for airlines over the Winter.
I couldn’t agree more with Ryan and Jayson, business travel may not return the same. I actually like zoom meetings, they are efficient for time management. I can offer a different perspective regarding business travel and reducing it. Less business travel means I can actually participant in activities that are not business related. It’s really freeing spending time with friends who are not connected to your career development and HR. Less business travel can reduce stress and improve employee’s mental health.
When I did travel for business I never had time to explore the area, I was always rushing to the airport and didn’t have time for lounges. I often felt sluggish from too much processed food. I spent over two years with brain fog.
What I do miss about travel is leisure travel! I can’t wait to get back to truly experiencing the world again
From the client’ perspective (in many businesses) Zoom meetings are preferred. It’s much more efficient. I’ve seen hour and hours wasted because the head of sales wants more “boots” on the ground. It never was about efficiency and now the data are in. You can grow sales dramatically without having boots on the ground. And many clients don’t allow you to pay for food etc. can be seen as a bribe by some org.
It will all be driven by the bottom line. If sales stop growing, put more boots on the ground. If your competitors put more boots on the ground and you’re not meeting your sales goals…. You know what will happen.
“It’s a good thing for our wallets and helps our sustainability targets.” What a BS. And he probably flies private jet.
I expect my old level of business travel will resume but I don’t think it will until 2024. 2023, it will increase. 2022 will still be very cautious. Why get long Covid over a stupid client?
For those that like the tangible connection and process of 1×1 interaction, they will get back to old habits. Most traveling is fundamentally about selling your product or yourself. I’ll happily pay $5,000 travel bill for $500,000 order. Idiots like mister sustainability and all the deadweight managers going to another group function will likely travel less and good ridden. Cannot tell you how many times I’ve been stuck behind three corporate group think drones on a flight circle talking with absolutely no chance any of them will ever make an independent decision. Let’s all hope they stay home. Or better yet, are just put two of the thee out to pasture. Two points for sustainability. Travel is an expense best reserved for those that can actually boost revenue.
I manage a very small 8 person salesteam with clients on 4 continents. We’re in the b2b space, our sales cycle is forever and relationships are everything. The only one itching to go back out for the most trivial reasons is also the one without a spouse and/or children at home. The rest of us, we’re absolutely happy to do zoom and calls until that mandatory in-person visit is required (outside of major industry shows). Flying from EU to the states for a 72 hour family call, then turning around to Asia absolutely sucks, biz class be damned.
Costs, carbon footprint are all important considerations for reduced biz travel in the future. But the most important factor will be the physical and mental health of not only my team but their families as well. And you can bet we’ll be on the road less for that reason alone.
@BrianWorld – I think you are right that some have been looking to travel less and will be able to accomplish that. But I think more gets done in front of people and there is an experiential element to consider. It’s a lot easier to walk away from an opportunity or cancel a business meeting when it’s just an hour Zoom call, a lot harder when they are in the lobby.
As Ryan pointed out, the workforce is spread out and this is due to sequential factors:
The Bad Idea of Open Office Floorplan. To “improve collaboration”, costs were cut by shoving employees onto the same desk. I hated it and so did others, but the managers loved it because they could come out of their (comfy) office and see everyone together like looking at animals in a zoo.
So employees looked for reasons to work from home. That cuts costs EVEN MORE! “No office” is even cheaper than a lousy one.
COVID accelerated this factor as ALL employees had to work from home in many situations.
Don’t forget the riots that made many cities into war zones where employees were rather relieved to not take their life into their hands to get to work.
Consequently, the infrastructure of the modern office has been decimated including the public transit systems that are on reduced hours due to lack of use and homeless/criminal elements vandalizing them.
With so few people in the office, it’s difficult to get them together for a sales presentation.
I personally think offices are necessary for human interaction and that the efficiency of working during COVID was due to many workers happy to escape the misery of their open office sweatshops so managers think “Oh, remote work is best!” because they learned the wrong lessons from the start. Nonetheless, as people become increasingly disconnected they learn… games.
If you don’t know a person and view them as a teammate, it may be easy to find ways to be “offline” if they are looking for you. Heck, I used this trick in the open office environment too since I took 5 minute breaks every hour. It was the only way to survive in the boiler room. Not only that, but someone trying to have a private meeting with me was impossible anyway since the ambient noise was so high they couldn’t pester me in person and expect me to hear them. Conference rooms were always busy with people in fake meetings to escape the mess.
Bringing back business travel is going to be a challenge as the whole infrastructure for a healthy office has been destroyed over the past 2 decades and it will take some time to come back. Managers learn how to get advanced first and foremost over more holistic ideals of restoring the business environment.
I agree that sales and marketing type travel will return, and probably has to a large extent already. What I am less confident about are “long term” travel by consultants, auditors, and the like where an entire work week is spent at a client site in another city. In-person touch points, if any, will be the norm.
Let me offer a market issue to accompany that. Deloitte, KPMG, and Bain might be able to continue to get the day rates for consultants during the pandemic, but it’s going to be hard to justify the same rates when no one is in the office to remind you they are there working. I know some consultants charge $4500-5000/day, others more & less – but when it’s just Zoom calls, those rates will likely drop. It’s just hard to justify and see the value, even if the value of the services isn’t reduced. While Deloitte, KPMG, and Bain might say they’d prefer the option to keep staff at home, travel is usually pass-through so whether they are at home or on the road doesn’t really matter but the reduction of day rates will, and that’s why embedded consultants will return.
But what do either of us know anyway? We are just looking into a crystal ball.
I suspect that this is exactly right. There are some industries for which travel will remain a necessity. Oil and construction related people will still need to be unavoidably on-site — but they are already back in the air. Sales and marketing people reliant on personal contact will likely join them at some point. But for the those the travel industry saw as the most high margin free spending – Finance, Law, Consulting – these people will need to travel only a tiny fraction of the levels they once did. Those industries have adjusted to remote work, and I don’t see them ever going back.
I love traveling, but I hate traveling for work . . . which is just work interrupted by the inconvenience and indignities of getting to and through airports. Before Covid I was on the road constantly, and since Covid I have taken exactly one business trip and have none on the calendar. Business travel is no longer justified, and easy to avoid for the sorts of people who used to be the most high margin travel customers. At least in my industry, I would expect business travel to stabilize at about 15%-20% of pre-Covid levels – I’ll be shocked if it exceeds that, and not at all surprised if it never attains it.
@Mak – Thank you for reading and for your thoughtful comments. I wanted to pop in a data point that might adjust your expectation of just how much work travel will return. Before the Delta variant took hold but with travel restrictions still officially in place both at a governmental level and corporate level, June had already returned to 40% at Delta Air Lines (the carrier not the variant) and it only bottomed to 20% at the height of the pandemic. Given those numbers, your suggestion of a return of only 15-20% would be low even if COVID-19 restrictions remain in place forever, and incorrect if a reprieve is offered. We are all kind of guessing what it will look like but even the companies mentioned that were making cuts to their travel division were slashing them 20-40% with a couple of extreme examples by 2/3rds. So at a minimum, we can expect somewhere between 33-80% return if the article’s anecdotal information were fact across the board. However, I suspect that many of those companies will have to return travelers to retain market position and margins. The travel industry guidance of 13% net reduction by 2024-35 might be optimistic, but not by much in my estimation.
ARC (which has a broader view than Delta as it books for several carriers) reported 37.8% improving to 48.2% of 2019 levels for corporate bookings.
Here’s the source from Delta Air Lines corporate bookings (also covered by the Wall Street Journal but that sits behind a paywall that some readers may not have access to) https://www.travelweekly.com/Travel-News/Airline-News/Delta-CEO-discusses-biz-travel-rebound.
@Kyle Of course, I could be underestimating, but my anecdotal sense is that most – really nearly all — of that initial travel burst were leisure travelers visiting friends and family whom they had been separated from for over a year, and catching up on lost time, and not business travelers returning to routine. Supporting this is the fact that while nearly every flight I’ve taken recently has been full, nearly every hotel I’ve stayed in (of the sort that would normally be populated mostly with business travelers) has been totally empty. As I’ve mentioned, my own personal experience supports this as I’ve gone from a heavy business traveler to one who has made a single business trip this year with none on the horizon and a new way of conducting business within my industry that should end most routine travel, and the flying experience made wretched by masks, testing requirements, and sundry weirdness (i.e., the bizarre hospital gowns they are still wearing on EK and QR despite all that we’ve learned about transmission that makes this stuff utterly superfluous and unnecessarily unpleasant for all concerned).
For me one wildcard is travel to Asia when (if?) it reopens. Remote work in these places poses special challenges due to time zone, language, and data security issues. It could well be that some of these meetings will still warrant getting on a plane. I am slightly optimistic about this region because I remember the days of Avian Flu when I was on 747s to Asia from North America with a dozen or so passengers aboard, and airports empty of people – actually worse than Covid ever was from a capacity standpoint in some places despite the fact that there were few of the inconveniences (i.e., masking, testing, etc.) that we face today and the fact that there were few technological tools beyond telephones and email. It was inconceivable in those moments that travel would return, but return it did. There are a lot more options to getting on a plane now though, so let’s see. Certainly the longer places like China, Honk Kong, Taiwan, Thailand, Singapore, Indonesia, etc., stay closed, and people become more accustomed to not traveling, the more difficult it will be to get people to resume their old ways of doing business.
I am on the side of thinking SOME industries will go back to in-person travel, but many will not. Sales is better in person but other things like consulting can be done remotely. I am in the diplomatic sphere and it will take ages to get back to international travel since I go places where they have barely begun rolling out the vaccine and therefore government to government work can’t happen in-person safely. However, the work we’ve tried to do remotely has been much less effective. A lot of what we accomplish is based on relationships (which always happen more organically in person and over lunch and coffee breaks, etc), and, in many cases, workshop sessions that need to be longer, intense discussions etc that can really only happen in person since any more than a couple hours on Zoom is horrible. In any event, I think international business travel is going to take awhile to come back, and will most likely not return as robustly in some sectors. It is a nuanced situation (US business travel is different from intl, different sectors are more likely to come back, etc).
I couldn’t agree more with Ryan.
I have YET to speak to someone with a family who wants to get back on the road like we were. Most of us would agree to once a month travel. Otherwise, I LOVE having a life outside of work. Guys, I go to Yoga class at 6pm on some days and I learn to play the guitar on others. It’s been 10 years since I was able to do stuff like that.
In my sector, prior to Covid, even the vendor was often remote so it’s not unusual for us to have virtual meetings. For me, I was on an airplane weekly. That means I was wasting all of Monday (arriving at noon, trying to eat, then getting settled in for work? nah) then heading back home by noon on Thursday. While Fridays are work days, most consultants only work half a day because you have things to do that can’t be done on weekends. What a drain on productivity for all of us consultants. Now, we are absolutely getting more done because we’re not losing 1.5 to 2 days a week in travel/adjustment. I work Monday thru Thursday 9 hour days then 4 hours on Friday.
I’m healthier, lost a crap ton of weight, get shocked every time I look at how much money I’ve been able to save, adopted a mutt, completed no fewer than 5 home improvement projects that have been in the wings for years….
I’m sorry but because Zoom or Teams “sucks” isn’t enough justification to offset all the positives some sectors have gained in terms of employee morale. I do heads down software development. NONE of my clients have mentioned returning to the office for consultants. I was in Orlando when things started shutting down. There were no fewer than 60 consultants TRAVELING onsite weekly. I can’t imagine the cost savings the company has seen.
I’ve taken about 10 flights for pleasure since the pandemic, including to Mexico twice. You don’t want to be in the airports. Folks are weird but it’s so “American” that folks really out here saying this is a “political stunt” when everyone on this floating rock is dying. Those folks are in the airport acting a dam fool and giving workers such a hard time for no reason and causing flight delays because they can’t follow the rules.
In the words of Sweet Georgia Brown, “ain’t nobody got time for that”.
I think you are spot on, Kyle. I predict that businesses that understand the value and importance of travel will flourish in the future. Those who listen to lazy employees who got used to being at home (and are making every excuse to stay there) will fall behind. This pandemic has brought out the true colors of so many.
This applies to not only activities like sales and consulting but internal meetings as well. I just hope all those advocating for “consulting from your kitchen” go to work for my competitors because soon my company will have all of their clients. And I will attract away all those employees they’ve alienated by never letting them meet in person.