Representing 25% of travelers and spending US$1,400 billion a year worldwide, business men and women contribute 55 to 75% of airline revenues.
With the Covid crisis, and the reduction of risks and expenses of companies, these trips dropped by more than 70%, in a clear threat to the economy of the sector. While resumption seems for now limited to leisure, and videoconferencing is set to stay, Chaire Pégase, a research center at the Montpellier University of Tourism in France, has published a study showing the trends and consequences of this competition between video and the face-to-face.
Before the crisis, 35% of companies had already started using video conferencing to reduce their financial, human and environmental costs. But the trend has accelerated. In the last 15 months, most business trips were canceled, either because of the need to reduce costs (31%), for health precautions (71%), inability to travel (55%), or the desire to contribute to the environment ( 22%). In 53% of cases, these trips were replaced by video conferences, with participants praising this evolution for being less tiring (65%), and allowing for a better balance between work and personal life (66%). But substitution has its drawbacks, 82% of stakeholders are saturated with video conferencing, lack of communication with colleagues (73%), missed opportunities to achieve their goals (64%)
Chaire Pegase’s research, however, shows a great diversity of opinions and behaviors depending on the types of trips, the economic sector and the size of the company. For those interviewed, trips related to technical interventions (59%), commercial prospecting and sales (59%), as well as customer relationships (50%) will be the quickest to restart. Afterwards, internal meetings in branches belonging to the same group should follow. Professional events, fairs, salons, conferences (27%), and incentives (30%) will only return in a second time, as well as events related to training (21%) that can be carried out in hybrid formats.
The resumption of business travel also depends on the companies’ sectors of activity. According to McKinsey, construction companies, real estate companies , pharmaceutical companies should be the first to free up travel, while the energy and textile sectors should take longer, as well as services and scientific research that will find it easier to follow in video conferences. The size of companies will be another differentiating factor. With more resources, large companies will be able to restart their business trips soon after the crisis, while small structures will have to rebuild their cashiers before thinking about investing more than the minimum necessary .
Video conferences have really changed the economy of the sector. In the short term, 70% of respondents think they will travel less until the end of the crisis, and 42% think this situation will last. Chaire Pégase’s research forecasts a 40% drop in business travel in the short term, while leisure tourism will recover from 2024 on its pre-crisis growth forecast. Good news for low cost airlines, but a strong concern for traditional airlines like Air France or Lufthansa that have built their economy models on top of these travelers. In the post-Covid world, they will not only have to rethink the services offered to better-targeted businessmen, but also pay much more attention to leisure tourists than the success of videoconferencing should not achieve.