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The Return of Corporate Travel in 2022

The Return of Corporate Travel in 2022

As COVID-19 began to spread around the world and air travel ground to a halt as people all over the world stayed home under different levels of lockdown, corporate travel nearly shut down. Companies restricted travel to only those trips deemed absolutely essential and wrapped in several layers of executive approval. Client meetings, pitch meetings, and even board meetings were conducted over Zoom and Microsoft Teams resulting in company travel expenses declining 71% in 2020. It also left the entire ecosystem built on business travel, from hotels and airlines to transportation services in shambles.

The lockdown on travel also saw companies realize not only the financial impact of travel on their bottom lines but also on the environment. The availability, low-cost, and ubiquitous adoption of tools for online meetings, conferences, and even virtual get-togethers has woken businesses up to easily being able to axe off a huge cost while improving their carbon credentials.

In 2022, as social and travel restrictions have been lifted around the world, travel itself has bounced back even as it has changed significantly. Business travel too has returned with over 50% of respondents in an April Global Business Travel Association (GBTA) member survey stating that they are developing a timeline for the resumption of travel while Deloitte projects business travel spend to reach 80% of 2019 levels at the end of 2022. Despite the visible growth and growing confidence however, the rebound in corporate travel is proving to be slower than leisure. This follows travel patterns following catastrophic events such as the 2008 financial crisis and September 11 terrorist attacks. The uncertainties brought on by the war in Ukraine, the continuing lockdown in some parts of China, rising inflation, and fears of new COVID variants will mean a slow recovery to reach previous highs. On the other hand, the easing of any or all of these worries can lead to a faster recovery.

GBTA, in its annual outlook, predicts global business travel to make a full recovery by the end of 2024, reaching $1.48 trillion to end above 2019 (pre-pandemic) spend of $1.4 trillion. Despite setbacks, it expects a year-on-year surge of 38% in 2022 with spending reaching over $1 trillion, and a year-over-year growth of 23% in 2023. The World Travel & Tourism Council (WTTC) echoes this with a forecasted growth of 34% in 2022. The Asia-Pacific is expected to lead the recovery in 2022 with a growth in spend of 41%, followed closely by America with 35% and the Middle East with 32%.

7 Corporate Travel Trends for 2022

As corporate travel rebounds, making a slower but steady recovery, pandemic-led effects like the digitization of business interactions and the slow return to the workplace, corporate fiscal tightening, increased concern for sustainability impacts and changes in perspective and behavior on the part of employees have all resulted in a business travel landscape that looks quite different to the contours of the pre-pandemic terrain. Here are the top 7 business travel trends for 2022.

The Return of Corporate Travel in 2022

1. End of the One-Day Trip

The old days of travelling for just one meeting are gone. Over the past two years not only has the full impact of corporate travel on the bottom line hit home for companies but employees have also shown themselves to be able to function just as well if not better without having to travel a lot. Together with the greater focus on fiscal conservatism in the post-pandemic era, travelling one whole day for just any one meeting is now a thing of the past.

Businesses have also learned which meetings absolutely require travel and which can be conducted just as well virtually. According to Deloitte’s corporate travel survey, respondents believe travelling to help establish and foster client relationships as the most important and least replaceable by technology.

The Return of Corporate Travel in 2022

2. Vacation Rentals Gain a Bigger Foothold

Traditionally, corporate travelers have stayed at hotels, preferring the ease of checking in and out, standardized rooms and amenities, business centers, relative anonymity, and the ability to stay in the heart of the city. The period of remote work brought on by pandemic lockdowns however saw employees choosing to stay for long periods of time in vacation rentals with their families whilst working, opening up new prospects for private rentals. In summer 2021, 28% of rental travelers stayed at one for the first time during the pandemic, rising to 43% by the holiday season. By the 2021 holiday season, 3 in 4 new rental travelers said they would continue to opt for the accommodation type even after the pandemic. Some corporates also got in on the action. Salesforce introduced its Success from Anywhere program during the pandemic, allowing employees to travel to an offsite or another office location and stay at an Airbnb they chose.

Hotels are likely to fight back by reconfiguring offerings, providing a live-in coworking experience including spacious rooms and improving wi-fi speeds. The Great Resignation however can leave at least some hotels struggling to cope as staffing challenges lead to less service on an already pandemic induced reduced offering. The US hotel industry had 300,000 fewer workers as of October 2021 compared to 2019 while in the UK, 58% of employees identified pandemic-induced industry staff shortages as the biggest challenge.

The Return of Corporate Travel in 2022

3. Mixing Business and Leisure

Blending business and leisure, ‘bleisure’ continues to buzz in the corporate travel market. As the lines between work, travel and personal life blurred, many people chose to enjoy a long working holiday with their families and pets in tow at rural locations. While employees begin to return to offices however hybrid and flexible work options continue for many, making long term rentals and bleisure trips a continuing trend. In response, Airbnb, the largest online travel company, recently unveiled Airbnb Split Stays and Airbnb Categories, the biggest update to the platform in the past decade.

According to Morning Consult’s February 2022 report, the share of former frequent travelers who plan on taking a bleisure trip this year is almost equal to those who will travel only for business. Meanwhile, the American Hotel & Lodging Association’s (AHLA) 2022 State of the Hotel Industry report found that 89% of global corporate travelers hoped to add a private holiday to their business trips over the next 12 months.

The Return of Corporate Travel in 2022

4. Returning to Base

A fresh trend in the business travel world, ‘return to base’ is the reverse of the old model of employees flying out of corporate headquarters to do business elsewhere. In return to base travel, remote workers are called into headquarters from time to time. A great example is Salesforce, with its new 75-acre, 140-room ‘Trailblazer Ranch’ campus in Scotts Valley, California that was conceived as a gathering place for its workforce of 70,000, most of whom work remotely or on a hybrid model.

The Return of Corporate Travel in 2022

5. Business Conferences and Corporate Retreats Rebound

As in-person business conferences and staff retreats return, destination-specific business events will see higher traction. Having spent so long out of the office and mostly interacting with colleagues virtually, leaders and employees are eager to enjoy in-person interactions. Dubbed the ‘Great Reconnection’, the trend will only be bolstered by people continuing to work from home full- and part-time as it makes such events a bigger necessity as well as more affordable due to the trimming of regular business travel. The trend has even given rise to a boom in retreat-planning startups such as NextRetreat and Troop.

The Return of Corporate Travel in 2022

6. The Sustainability Factor

The pandemic-led near-total shutdown of corporate travel also brought companies to the realization of the environmental impact of their business travels. As a focus on carbon emissions and sustainability becomes a bigger imperative for businesses of all types and sizes, cutting down on travel allows organizations to easily improve green credentials without restructuring or realigning processes and suppliers. According to Deloitte, half of the companies say they are optimizing business travel policies to support sustainability goals while 1 in 10 companies expect a reduction of travel budgets by 11-25% by 2025 to increase sustainability.

Aside from cutting down on travel, businesses are also looking to make travel more sustainable, choosing to stay in hotels with great sustainability credentials, for example. In London, the Green Tourism gold-accredited One Aldwych practices sustainable food sourcing, on-site composting, and biodegradable amenity packaging while Good Hotel, a building repurposed from a derelict floating hotel, donates its profits to social causes around the world. Many will look to travel management companies for guidance, providing new opportunities to help corporate clients achieve a greener travel footprint.

The Return of Corporate Travel in 2022

7. Safety & Flexibility Still a Priority

Even as mask mandates and other restrictions have eased in most places, safety and flexibility will continue to remain a priority. Business travelers will expect sanitized spaces, single-use amenities, minimal contact and self-check-in. The continuing focus has in fact led to an increase in the use of private jets allowing business leaders and C-suite executives to enjoy minimal touchpoints, spaced out seating and uncrowded planes, as well as custom services. Flexible cancellation policies too continue to be an expectation as uncertainties in the global climate remain.

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