Continuing their work on behalf of the business travel sector in Spain, GEBTA and BRAINTRUST have recently conducted a qualitative study which shows that the pace of business travel recovery remains slow, and that it will take at least two to three years for business travel volumes to recover to pre-pandemic levels.
Significant improvement in activity in the months following containment, albeit at a slow pace of recovery.
The study has analysed the different economic variables affecting corporate travel in the current context of COVID - 19, and the evolution of the sector in recent months. Although business travel has seen a notable improvement since the drop experienced during the first phase of the health crisis - where falls of more than 95% were recorded - activity levels at the end of September are still well below pre-pandemic levels and are, overall, around 30% of those recorded in the same period of the previous year.
The projections in the document prepared by GEBTA and BRAINTRUST also estimate that activity levels at the end of 2020 will still be below 50% of those reached the previous year. According to the study, it will take at least two to three years to return to the same levels. At the close of the 2019 financial year, the volume of investment in business travel by Spanish companies reached 12,800 million euros, just over 1% of Spain's total GDP.
Similarly, the report reveals that the recovery will be at different speeds, starting in the last part of 2020 and the first months of next year with the reactivation of domestic traffic, followed by the recovery of European and international travel and the first glimpses of the MICE segment in 2021, to consolidate in 2022, and recover pre-pandemic levels in 2023.
Spanish SMEs the most travelled during the COVID 19 crisis, with some sectors more prone to travel than others
The study also identifies the most active economic sectors during the pandemic and the changes registered as a result of its outbreak. In this regard, the document finds that unlike the composition of expenditure recorded in 2019, in which 45% of total investment corresponded to 2.4% of the largest Spanish companies, 43% to companies with a turnover between 1M and 50M euros (43%) and the remaining 11% to smaller companies, in 2020 it would be the SMEs who would be generating the greatest volume of travel - with some exceptions depending on the sectors of activity.
The differences identified are mainly attributable to the application of more restrictive travel policies by large corporations and a greater reliance on international markets, particularly long-haul markets. Small and medium-sized companies, generally more focused on domestic and proximity markets, are reportedly applying more flexible travel policies and being less restrictive in terms of business travel.
The first industries to travel will be those that have benefited from the crisis, such as Pharma, Food, E-Commerce, Distribution and Telco, followed by Industry, Agriculture, Logistics and Insurance, while Banking, Retail, Leisure and Tourism will be the latest. In terms of the speed of recovery by type of travel, commercial travel will be the first, followed by intra-company travel, training and small meetings, with large events being the last to appear due to the factors that the pandemic is restricting the most, mobility and interaction between people.
The COVID 19 crisis is bringing about changes in the habits of companies, and with it new travel needs.
The GEBTA and BRAINTRUST document illustrates the changes that companies will experience in the coming times, not only as a result of the impact of the current crisis but also due to the acceleration of trends that had already been pointed out previously, among which we should highlight the continuous search for the return of every euro spent, the essentiality of travel, digitalisation as a form of competitiveness, or the care of the employee and the protection of the environment.
The current context of COVID - 19 has accelerated other processes in companies, such as the relocation of supply chains, and has caused other problems such as economic tensions or the slump in demand, resulting in a very significant drop in the volume of travel. In this new scenario, the future is clearly pointing towards a model in which technology will have a high level of implementation and most of the processes will be integrated.
Within this framework, GEBTA and BRAINTRUST approach with realism and optimism the strategies of adaptation of the sector to the needs of the new scenario, with the aim of guaranteeing the adequate service to the demand and at the same time the sustainability of the business models.
Marcel Forns, Managing Director of GEBTA, said: "Inthe current context, in which data and information are still highly disaggregated and affected by continuous changes, the main challenge for the different actors in the value chain, which we must face together, is to facilitate access to information in an organised way, in order to support companies both in making decisions that affect travel and in improving processes, in order to ensure maximum productivity, as companies will continue to need travel to develop and grow".
The role of business travel agencies is becoming essential, seeing their share increase thanks to their added value in times of uncertainty and risk.
The research shows that, although the size of the market will decrease over the next few years, agencies will see their share increase from 40% of total business travel in Spain to more than 50%, taking business away from OTAs and direct sales.
This is mainly due to the courage that agencies have shown since the crisis began, managing travellers' locations and subsequent repatriations, working intensively on exchanges and reimbursements from end suppliers, which would otherwise have been difficult to do, putting the customer at the centre of their activities.
All client companies recognise this value of agencies, which, in times of risk and uncertainty, play a more relevant role than ever, demonstrating that the best option for optimising travel investment and guaranteeing the safety and comfort of travellers is to put them in the hands of specialists rather than venturing into the hands of industry sniatracitidumbre har to change their model, they play a role with suppliers directly or through agencies with a lower level of preparation and specialisation.
This crisis will take many companies with it and will see a new concentration of the industry
Finally, the study by GEBTA and BRAINTRUST advances what is already known, that every crisis generates opportunities, and although it will lead to the disappearance of many companies in the sector and the concentration of others in order to emerge stronger and healthier, it will also see the birth of other companies and other models more adapted to the reality of the coming years, because nothing will ever be the same again, and where new generations will take over the positions of responsibility migrating to much more digital models, so that full omni-channel will already be a must and not a necessity.
Falling revenues, gradual loss of profitability, liquidity problems and business model difficulties in the short, medium and long term will be the triggers for the next developments we will see in the travel industry worldwide.
For Angel García Butragueño, BRAINTRUST's Director of Leisure and Tourism, "this is an unprecedented crisis, where business travel migrates from its role as a driver of the economy to a driving role, which is no less important. We are going to see structural changes that will fully affect the size and physiognomy of the industry, and the role that each must play in the times ahead, where the most important thing will be collaboration and not competition, to cross the desert to reach a new oasis in two or three years. The new vectors that will mark the optimal management for companies will be people, profit & planet, and only business travel agencies will be able to ensure these 3 objectives in favour of their clients. To do so, it will be necessary to cross the door of reinvention, which is now essential, abandoning their role as fullfillers to add value to the client's business. Now is the time for all of us to create a different sector".
