Online domestic flight bookings totaled $5.1 billion in May, according to data released on Monday by Adobe Analytics. That’s off 4 percent from April and down 20 percent from the same month two years ago — and the big culprit is a stubborn lack of business travel, the firm said.
Only 11 percent of workers are planning on traveling for business in the next six months, according to the firm — and 29 percent of those surveyed still don’t feel safe traveling.
“An increase in vaccinations and consumer confidence have unleashed some pent-up demand, but the lack of business travel is beginning to slow the comeback,” the data firm said. “The lack of business travel (as companies take a careful approach to re-opening) and lingering consumer hesitation are prolonging the road to recovery.”
According to the Global Business Travel Association, this year spending on work travel will increase 21 percent in 2021 — especially toward the end of the year as vaccinations become more widespread. But the group doesn’t expect a full recovery until 2025.
Financial firms have been the biggest proponents of getting back to the office — but even as they seek to bring employees back to headquarters, they have yet to fully resume travel-heavy initiatives such roadshows for initial public offerings. Likewise, most conferences and investor relations meetings, which previously accounted for a significant amount of travel, remain online.
Industries like consulting and law that required extensive travel aren’t even close to where they were before the coronavirus shuttered travel, experts say.
“Some firms that had in-person board meetings last quarter have reverted back to Zoom this quarter,” Jeffrey Sonnenfeld Yale School of Management senior associate dean told The Post. “There’s a cost-savings, and moving forward some companies may only choose to do half of their meetings in-person.”
Amazon and Google each saved more than $1 billion on travel costs last year as the pandemic halted business trips. Saving that kind of money will be hard to give up. But others believe once some companies commence business trips, it’ll pressure others to get back on the road.
“They’ll save money on travel until they start losing business,” Thomas Hayes Founder, Chairman and Managing Member of Great Hill Capital, LLC tells The Post. “No one in their right mind wants to get on a Zoom call. They want to get a steak dinner.”
Much of the decision to get back on the road will stem from what the competition is doing. And as some people resume travel, it could create an element of peer pressure or FOMO (fear of missing out) that forces competitors to get on a plane.
As The Post reported Friday, companies like Morgan Stanley are pushing clients and investors to resume meetings and polling them for their willingness to attend conferences and travel both domestically and internationally.
JPMorgan notably has been pushing bankers to get back on the road. At the WSJ CEO Council in May, Jamie Dimon said, “There are a bunch of clients who gave business to somebody else because the bankers from the other guys visited and ours didn’t. OK, well, that’s a lesson.”
“Whether it’s a flywheel or a catalytic effect, ambitious people will start to travel in greater numbers,” Sonnenfeld adds. “Proximity does matter.”
Many companies are prioritizing a full return to the office and are still weighing the pros and cons of sending employees on trips internally. Companies like SoftBank and BlackRock have yet to make a decision on the matter.
Still, others believe it will be a gradual transition to get back to life before coronavirus.
“There’s a whole ecosystem,” Harlan Peltz, founder and Co-Executive Chairman of iBorrow tells The Post. “You can’t travel if there’s no one to meet with… and that’s going to impact business travel.”