Has business travel really changed forever?

[Beaker_]

From reading comments in a number of threads, I can't help but notice that some people firmly believe that COVID has changed business travel forever. I'm not sure I agree so wanted to chuck my two pence in and see what others think. I'm a modular student in my 30's and currently work in an organization with a few thousand employees across a number of sites in the UK as well as a few overseas. So I'm giving this from the perspective of someone who does occasionally travel for work.

There are of course plenty of instances where someone absolutely must travel as part of their job such as engineers installing equipment, performing maintenance etc. and short of some significant advances in technology that won't change for some time.

So yes, businesses across the world have been forced to use meeting tools such as Teams, Zoom etc. and I really wouldn't be surprised if a hybrid working model becomes the norm for a lot of places. For the organization I work for, online meeting tools such have been the norm for many years. However, there are plenty of occasions where people would get together in a room as opposed to an online meeting for the simple fact that some things work better this way. Nothing can really replace human contact for the same reason having a couple of beers with a mate at the pub is far better than over a video chat. It just isn't the same, is it?

To give another example, I'll often attend training courses as part of my job. I can choose to attend these in person or over video link in the comfort of my own home. When the video link option became available a few years ago, I thought I'd give it a try for convenience sake. Whilst it technically worked well etc. it just wasn't the same. Without actually being there, I felt more like a spectator than part of the session and it just wasn't as engaging. Other peers have felt the same and I've since preferred to attend these in person.

I imagine that there are some companies that have never ventured into online conferencing etc. and COVID will have forced them to change, I would guess these must be in the minority these days though.

To summarize, whilst online conferencing is technically great and has served as a workaround over the past year or so, I think it's just that; a workaround. I'm not sure there will be a dramatic shift. Companies are obliged to provide a safe working environment for employees, but when the risk is no longer there or negligible, I can personally see travel returning to close to normal.

What are other people's thoughts?

[SpringHeeledJack]

It will become an even more niche market, a hybrid of the old one once things settle down again, whenever the hell that will be!

[MAC 40612]

There will certainly be cases where business travel will be needed but there are also a lot of cases where companies have come to realise, through the pandemic, that a chunk of business travel is not strictly necessary. The factor that will focus the minds of a lot of companies, is the large amount of money that they have saved by not sending people overseas, especially as far as business travel is concerned, as the tickets are always pretty pricey. A lot of airlines obviously think there is going to be a lull in the numbers for a considerable time with airlines retiring excess capacity [even in modern airliners like the A380] and others re-configuring their interiors with more premium economy type seats instead of business class. Other carriers are "upping their game" to improve their business class offering, anticipating there will be a fight on for the fewer business class travellers that will still be flying. If you're lucky enough to still be flying around, you might find the service is better than pre-pandemic :ok:

[Mr Mac]

Getting back to normal for my business with travel, though we have done it throughout the pandemic as Construction sector has key worker status. Long haul flights down from 18 to 6 with short haul down from many to around 30 on April to April basis. Already done 1 long haul and 4 short haul this year, and diary filling up. It has not been easy, and testing and quarantine are a pain, but it has proved to be a very successful year for us.
Aviation in China I am told is up 10% up on pre Covid levels, so not everyone buying into Zoom / Teams mantra , we have not, and it has proved very successful. Personally the big drop has been holiday flights, with only 1 last year 😢 Hoping to do a lot more this year starting with another trip to Madeira in August 👍👍

Cheers
Mr Mac

[flyingfemme]

We have been doing business globally for over 30 years. While the travel is not always necessary, although it’s tough to fly an aircraft without being there, we have survived through personal relationships. These are not built on phone calls or video. Showing up, shaking hands, looking each other in the eye and sharing a meal all build strong bonds of trust. In these days of fancy scams that’s important.

[Mr Mac]

Flyingfemme
Could not agree more and glad to hear that you and your company are also weathering this storm.
Cheers
Mr Mac

[Beaker_]

Showing up, shaking hands, looking each other in the eye and sharing a meal all build strong bonds of trust. In these days of fancy scams that’s important.

That's a good point I had not considered. Working relationships are certainly stronger with those I see at least occasionally rather than those I've only personally met once or twice or even not at all.

Actually, one other thought occurred a while ago... I wonder how many of the wealthy passengers who would normally fly first class have opted for chartered private jets when they needed to travel over the past year and now they may not want to go back to their old ways of travelling.

I could be completely wrong, but I'm not 100% convinced things have negatively changed forever.

[PAXboy]

I have probably said in here before: When in telecommunications, I started with Video Conferencing systems in 1987. I used video and audio conf systems and then, when I changed jobs, from home for the last 20 years.
There is no real substitution for being there. Video can help a lot after you have made contact (and hopefully contract) but you have to be there.

When they show you around their premises (be they supplier or client) you can spot things and asks questions about detail that is otherwise beyond you.

[Hartington]

I am neither a pilot nor an engineer. Many years ago, prior to 9/11, I was visiting the aunt of my wife in San Francisco. The Aunt had a friend who was something senior at the United base at SFO. He kindly agreed to take me on a tour.
Now, maybe I'm reading too much into this but he took me everywhere. We went through a completely stripped out 747, into the shop where they were packing escape chutes, the engine shop, I don't think we missed anything.
Another occasion in the USA I asked someone in a railway museum about a particular item in their collection I couldn't find. He had to drive the next train (I went with him) after which he took me to the shed where the item was. As we trundled down the main line he stood out from behind the controls and asked if I'd like to drive.
What's any of that got to do with business travel? It's about personal contact. Set aside the simple fact that neither could have happened if I had not "been there" I put both experiences down to the fact that I was asking "the right questions" and talking sensibly.
In a business context one of my clients had a particular problem. After some investiagtion (including a visit to the client) I came to the conclusion that the issue was related to a competitor company to my employer. However, I had met someone from that comptitor at several industry meetings so I phoned him. He put me in touch with somone at head office, problem solved. Had I not attended the meetings I might have seen him on Zoom but I wouldn't have gone out for a beer where we got to know each other which meant I felt able to phone him.
Humans are (generally) sociable beings. The contacts we make face to face are stronger than any we might make on a video call.
A slightly different tack. Companies go through phases. Yes, you can travel. Then the budget gets a bit tight so, essential travel only. Then things ease a bit and you even get business class for long haul. Then the budget gets tight etc. etc. I see Zoom and Teams in that light. In the short term we'll continue to use them but I anticipate a return to getting in the car, or train, or plane, or row boat(!) to occur but probably not for a few years.
Probably when the boss has had a miserable Zoom call and decided a person to person meeting is needed!

[Less Hair]

Web conferences can take a lot of the routine meetings and company team folklore meetings. But this move has happened long before Covid. What is left will stay as personal meetings cannot be substituted. Confidential matters are nothing for web-conferences and e-mails. Many companies experience this and stolen data only now. Whoever had a web connection fail during important meetings will insist on being there in person for the truly important stuff the next time. During Covid positions and people changed. So the need to meet in person is even bigger and more urgent now.

Business travel will resume and come back. However cost might play a bigger role. This is why I am sceptical about Premium Economy growth predictions myself expecting people to go either cheap or comfortable, Basic Economy or Business Class.

[SpringHeeledJack]

The very wealthy, who have used private aircraft during the last 14months to avoid and minimise the potential risks of catching covid on commercial flights might well continue to use these private flights so long as they are convenient and cost effective. However, for longer haul the commercial product will triumph, both by cost and reliability. Such persons didn't get very rich by squandering money foolishly. The extremely wealthy will carry on as before, using their own private aircraft. I heard of such a family in California who own a G650ER, but use it minimally, and for legs of less than 400miles! All about being comfortable and projecting the right image....

As mentioned, the value of personal meetings, especially when it comes to strong business relationships and trust becomes more important the larger the business and longer the relationship. Business class will be the chariot to bridge the gaps, otherwise it will just end up being "Our algorithm against your algorithm" at some point in the not too distant future.

[Ancient Observer]

I used to work for a Global multi-national.

In the jobs I did, the need for relationships was v v important.

However, some groups got together because they could. They had a travel budget and used it. IMHO the "Travel Budget - so use it" travel will end.

Some biz travel will come back. Much will not.

[Less Hair]

As soon as your competitor starts to present his new stuff to the customer in person you will need to follow.
I agree that we might not see global "climate conferences" with 20k participants and no real use anymore.

[krismiler]

A percentage of business travel will return, the question is how much. The technology for online meetings improved and was used because there was no other option, how many people had even heard of Zoom before COVID happened ?

The personal touch is still needed and somethings can’t be done online so the essential trips will still be made. If it can be done equally well online then it’s gone for good because the COVID lockdown changed the playing field and the teams adapted permanently to the new rules which they have found are saving them money.

Airlines with premium cabins will still need to fill them so I would expect to see discounting in an attempt to tip the balance in a decision over a marginally necessary trip or to persuade a few better off pax to upgrade from economy.

A business class ticket at 3-4 times the economy fare will be a difficult sell, get the fare down to double the economy price and you’ll have a lot more interest. Basically it comes down to yield management and how much they can get away with charging.

[Pat UK]

I was to read thru this thread but after just one reply to the OP I lost the plot if this thread is about travelling on business or travelling in business class!

[Dryce]

As soon as your competitor starts to present his new stuff to the customer in person you will need to follow.


Many more people willing / expecting to be able to do that presentation over a remote link.

And doing it over the link gets there quicker and potentially at the *customer's* convenence.

You're also assuming that there will be offices to visit.

It doesn't mean that the need for travel for business will not resume - just that its value to many customers has probably diminished - so I don't think demand is likely to return to previous levels.

[PAXboy]

Overall, I agree with Dryce with no full return to previous levels.

A key factor in who travels for buisness may well be age related. Those who have been used to the regular travelling, may want to get back to it. New business' may well start with a different approach, particularly those forged during the pandemic. Further, as new generations move up the corporate greasy pole, they might change the way the older generation operated.

[Chief Willy]

A percentage of business travel will return, the question is how much. The technology for online meetings improved and was used because there was no other option, how many people had even heard of Zoom before COVID happened ?

The personal touch is still needed and somethings can’t be done online so the essential trips will still be made. If it can be done equally well online then it’s gone for good because the COVID lockdown changed the playing field and the teams adapted permanently to the new rules which they have found are saving them money.

Airlines with premium cabins will still need to fill them so I would expect to see discounting in an attempt to tip the balance in a decision over a marginally necessary trip or to persuade a few better off pax to upgrade from economy.

A business class ticket at 3-4 times the economy fare will be a difficult sell, get the fare down to double the economy price and you’ll have a lot more interest. Basically it comes down to yield management and how much they can get away with charging.

Seeing as business class seats take up
the space of at least 3 economy seats it would not make economic sense to have that real estate selling for less than 3x economy prices.

[Espada III]

In the last year I have 'attended' several training sessions over videoconference. The only ones I got a lot from were those where the lecturer and the participants all knew each other to a greater or lesser degree. It was much more interactive and therefore the quality of the learning was greater. The sessions in which I knew no one, I kept quiet and as someone has said above, I felt like a spectator.

How do you go from the latter to the former? You have to meet them face to face.... Meetings will return and business travel will return; maybe in a different way, but it will return, otherwise connections will be lost and therefore so will business.

[Mr Mac]

Many more people willing / expecting to be able to do that presentation over a remote link.

And doing it over the link gets there quicker and potentially at the *customer's* convenence.

You're also assuming that there will be offices to visit.

It doesn't mean that the need for travel for business will not resume - just that its value to many customers has probably diminished - so I don't think demand is likely to return to previous levels.
Dryce
Offices are open for business all over the world when you want them to be, but there needs to be a want. It maybe some people do not want to return to work in the same old way, as it did not fit with their life style. I have heard from customers who are having huge issues with people working from home, who basically believe they can do their hours when ever they want, ignoring the fact that other people need to be in touch with them during core hours. Sending responses to questions at 22.00 to a question asked at 10.00 in the same time zone is unreasonable, and puts pressure on the whole team, but I have had that same example trotted out to me nearly 10 times from various companies in the UK in the last 2 weeks while over there. That method of work will lead to issues for companies, and ultimately the individuals involved. Many people in companies who did not get furloughed have worked really hard, and many on reduced pay to keep the wheels going around while other took months off at 80% pay but often with reduced mortgage etc. Not sure I agree with your view of the future, and I hope your company is lucky as everything we are being told about the UK business sector in the coming year is distinctly gloomy as companies will go bust when weened off the Govt Covid support. As regards Business travel, my people are up and travelling and meeting people and closing deals.Its not easy, and it is costly, and not so much fun in these strange times, but our hit rate justifies the expense, and THE some what limited risk due to young teams, and vaccines and common sense. You have to come out of the bunker some time.

Cheers
Mr Mac

[Asturias56]

"You have to come out of the bunker some time."

of course - but the landscape may have changed quite a bit................. We're seeing a couple of changes that may be permanent . For people who have jobs which don't require constant interaction - such as designing things and thinking - WFH is brilliant we're seeing more work, more quality work and people are saving cash and are refreshed mentally from not commuting.

Brain storming and reviews are not working as well. People miss the physical clues. Generally its looking like most people will do 1 day a week or every 2 weeks in the office and a small group will be doing 3-4 days a week in.

One of the best things is the absence of sales people banging on the doors...............

[ZFT]

Is there any evidence that WFH is 'brilliant`?

Once the novelty wears off and Employers adjust salaries to reflect the lower WFH costs, I suspect we will see another realignment.

[SpringHeeledJack]

Once the novelty wears off and Employers adjust salaries to reflect the lower WFH costs, I suspect we will see another realignment.


I had this discussion several times over the last 14 months or so with a friend whose wife is a lawyer who has been 'WFH' instead of the city of London. They live outside the London area and I said that at some point she would be called back as a physical presence with colleagues and clients would be optimal. He always countered that apart from a court presence she could WFH until the cows came home as long as the work got done. It does get done, but uses up several more hours per day to do so, so no real benefit in not commuting. "What happens when London Weighting is stopped as you're no longer working in London ?" "They'll just pay her the same"....Well now it seems that she will be expected to be in the office 4 days a week and anyone who lives outside London will lose the London Weighting in due course if they primarily WFH.

I had a chat with my hairdresser last week (as you do) and they said that of their regular clients in central London, most were expected to work at least a 4 day week in the office from June 21st or lose their desk and other assumed benefits within the companies going forward. WFH Friday's or Monday's would become the norm for the foreseeable future in many corporate environments.

[Asturias56]

"but uses up several more hours per day to do so, so no real benefit in not commuting" - the difference being that you are sat at home and not crammed on a train, paying £5k ++ for the privilege, with the sweating masses and no way out

I know of several very large outfits that have told their staff to plan on a max of 1 day a week in office. And they're cutting their offices down as fast as possible to get the gain on rents. Many say they see a significant GAIN in productivity from people WFH

[ZFT]

WFH is 'brilliant`, many say they see a significant GAIN in productivity from people.

Again, where is the evidence for these statements?

[Cymmon]

My long haul flight in economy starts at £456, business is now £1,700 plus. I wonder which I'll choose?

[ATSA1]

I know several people who now work from home, and they say they will never go back to the office!
So even if people want to have eye to eye meetings in the future, will the company pay for business class, or just send them on economy? methinks the company will now seek to cut costs!
I have only flown business class a few times, and only once on Long haul, and while it was a very pleasant experience, was it worth it? Not sure! The lounges pre and post flight were the best bit, but the aircraft?
So, if the travelling public won't pay business class prices any more, then where do the airlines make a profit?

[SpringHeeledJack]

WFH is 'brilliant`, many say they see a significant GAIN in productivity from people.

Again, where is the evidence for these statements?

I don't imagine that there's enough shared data yet to make a call one way or the other on this matter. I'd say that certain industries and businesses, and for that matter certain personality types are finding that WFH is incredible, whilst other are experiencing the opposite in the long run. There have been many reports over the last 14 months of people working longer, or being expected to be available outside of a normal working day of an office. Whilst saving on commuting, the net gain isn't so great.

Companies will try to cut costs, that's what they do, especially the more the 'bean counters' are given hegemony over others. However, the old adage "Buy cheap, buy twice" will be needed to be adhered to and saving on an economy flight and having your staff arrive stressed and not on their best game would be a false economy compared with a business class seat on the same flight. Short haul of less than 2 hrs I suppose wouldn't make too much of a difference, though lounge access might sweeten the experience and allow work whilst waiting for the flight.

[Asturias56]

"Again, where is the evidence for these statements?"

mainly anecdotal of course as companies are very reluctant to actually measure "productivity" in offices - fine in warehouses and production lines but when did you last hear of an Accountant being clocked on output. But I 'm talking about large engineering concerns wild world-wise operations. Some of their people haven't been into the office in 14 months and they all seem to be doing fine

[krismiler]

Seeing as business class seats take up
the space of at least 3 economy seats it would not make economic sense to have that real estate selling for less than 3x economy prices.

Aircraft that are already configured for business class will need to have that cabin filled, and selling at a discount is better than having it empty. As things move into the new normal, airlines will be able to assess what the demand is for business class and price it accordingly. It’s quite possible that the back few rows of J class get removed and replaced with economy or premium economy seats.

The prices of tickets will be all over the place at first while airlines try to gauge supply and demand after a complete reset. Booking and fare management systems will take a while to settle down.

[Beaker_]

An interesting range of opinions; thanks for the comments :)

[Rush2112]

Showing up, shaking hands, looking each other in the eye and sharing a meal all build strong bonds of trust. In these days of fancy scams that’s important.

Exactly. My company has been looking to do a couple of deals but what's holding us back is just that.

What will change I believe is the pointless travel "because we can". Board Meetings with overseas based Directors, probably 2 of 4 a year will be virtual at least. One time, at a previous company, I as the CFO and the CEO were summoned to HO in Croydon for a meeting that lasted a day. 3 or 4 other attendees were there from Hartford, CT and the others from HO itself. The topic, how to cut costs in Singapore. 2 J class in SQ, 2 nights' accommodation each and assorted transport to/from LHR. Madness.