A Bloomberg survey of 45 companies around the globe suggests that business travel as we’ve known it isn’t coming back. Over 80% of the companies plan to cut down on corporate travel, and most will spend 20%–40% less on travel than in the past. People have got used to online replacements for in-person meetings, and there’s increasing pressure on companies to show that they’re reducing their environmental footprint in obvious activities such as travel.
As customers, many of us have got used to asking for sales meetings to be online, but I’ve recently experienced a vendor requesting it for the first time. Normally, we still like to get our sales people through the door physically if we can, but in this case, the vendor (a financial services company) had presumably done its sums and worked out that any disadvantage in sales effectiveness by undertaking the process on screen was more than compensated for by the reduced cost of sales in terms of time and money.
The peak of business travel was in 2019, when it was estimated to have cost just over a trillion pounds worldwide. That’s over £130 for each person on the planet, and of course many thousands of pounds for each one who actually travels for business. Respondents to the survey above said that a lack of business travel during the pandemic had little impact on operations. The hotel sector may end up being hardest hit, but although only 12% of airline travellers are flying for work-related purposes, 75% of airlines’ profit comes from this, and that will inevitably lead to severe financial problems there too.
I discussed the implications of this right at the start of the pandemic, and suggested the knock-on effects on the trade show and conference sector could be almost terminal. Back in May 2020, I wrote: “Conference and exhibition organising companies will limp on through the current economic situation in the same way as other businesses, and they’ll return with a surge of events, both postponed and new, inevitably with an unprecedented sales push. The conference and exhibition industry may have proved surprisingly resilient in the twenty-first century, but it’s about to have its biggest challenge yet.”
The problem may be that rising prices for travel and accommodation could easily put the industry into a death spiral. At trade shows, if there are fewer exhibitors, there won’t be as many attendees, and if there are fewer attendees, fewer businesses will want to exhibit. This could even have a knock-on effect for local events.