BRAINTRUST forecasts in a new study on the post-pandemic revival of business travel, that a more conscious and responsible business travel is coming, whose role is amplified by the need to travel for business, growing rapidly over the next two years as it prepares for a new transformation towards sustainability. Specialised agencies take a leading role, laying the foundations for a new era where travel will be more environmentally friendly, with the market in Spain recovering to pre-pandemic levels by 2025, before growing again at a more moderate pace until 2030.
Business travel market to grow by over 50% by 2023
BRAINTRUST has just published the conclusions of its Tourism Barometer on the recovery of business travel, stating that the sector is taking flight with growth rates of over 50% in the next 2 years, although it will not return to pre-COVID levels until 2025, given the unstoppable advance of certain conditions, which the consultancy already predicted before the pandemic, and which are now accelerating.
Among the positive impacts, the consultancy highlights:
- Progress on mass vaccination in major Western business travel countries, and the implementation of the digital green certificate in Europe.
- More travel in an evolved, globalised economy, where collaboration between large and small companies (and freelancers) will be greater.
- New reasons for travel, such as meetings that will bring together remote workers more regularly, or strategic events that will bring together much smaller numbers of people much more frequently.
- Common policies in the European Union and Global Partnerships that will favour the exchange of people in international projects.
- Increased activity in the bleisure segment, as new generations of travellers combine work and leisure.
- New economies that will emerge in the heat of a new society, such as the green economy, the digital economy or the circular economy.
Among the constraints that can have a negative impact are:
- A scenario of volatility and health insecurity will continue to affect long-haul travel, in countries without group immunity, impacting significantly on the total market volume in 2022 and 2023.
- Potential emergence of new variants of the coronavirus, which would slow down recovery in parts of the world, if vaccines do not cover their performance.
- The rise of teleworking, which is here to stay, and whose influence will significantly reduce commuting.
- The use of digital tools, which have accelerated a hybrid face-to-face communication format, eliminating some of the non-essential travel, especially internal meetings to nearby destinations.
- The disappearance of a business fabric damaged by the crisis once public aid comes to an end, especially SMEs and the self-employed, a large part of the travellers in these times of pandemic.
- The arrival of a new generation of travellers with work life balance in their DNA, where millennials and Z's are the majority, and where the baby boomers more used to travelling for work are retiring from the work scene.
- The Sustainable Development Goals included in the 2030 agenda, fed by all government policies, which will favour the culture of more respectful companies and more responsible travellers, with more restrictive policies, the effect of which would be very relevant for travel in the coming years.
Against this backdrop, BRAINTRUST anticipates that, although business travel will recover sharply in the coming months - on the back of the holiday market - its high growth rates of recent decades will disappear in the face of a more conscious business travel.
Thus, it reveals that this year 2021 would reach 52% of the volume of 2019, with a significant upturn in 2022 and 2023 to reach 83%, and then rise to pre-COVID levels in the following 2 years, and continue to grow at much more moderate levels given the strength of sustainability that will characterise the entire tourism industry, as long as the evolution of the pandemic goes as planned.
The 2030 Agenda and the goal of a green economy in the EU will take precedence in the industry, inviting customers to strengthen their CSR policies.
One of the biggest impacts on the business travel industry will be the 2030 Agenda, and with it, the fulfilment of the Sustainable Development Goals, where caring for the planet in the face of compulsive deterioration in recent years will be a necessity rather than a priority.
Many of these targets affect the tourism industry, and in particular business travel, where some travel can be replaced by digital communications, thus positively influencing the reduction of greenhouse gases, a strategy that all European governments will follow in their agendas. BRAINTRUST believes that this is an irreversible path, inviting companies to reinforce their Corporate Social Responsibility strategies, not only by offsetting the impact, but also by eliminating from their policies the unnecessary travel now called non-essential.
The question that remains to be seen is the level of adherence to these Sustainable Development Goals by some of the biggest emitters of business travellers, such as China, the United States and India, which are also the biggest emitters of pollutants in the world. Europe has already delivered its verdict by putting the fight against climate change and the promotion of the green economy at the centre of its strategy, while the Biden Administration is making these goals a priority, even returning to the Paris Pact that Trump had abandoned.
The BRAINTRUST study delves deeper into this footprint, and has estimated a 20-30% impact on short-haul travel, which includes a large share of all domestic and European travel, although long-haul travel will remain and increase, which will remain.
The consultancy predicts sustained growth in long-haul travel, which will be given more prominence for the opportunity it can bring - even if there is a relocation of supplies - but will seek to expand its customer base in a post-pandemic global world, while air travel under two and a half hours will plummet over the next 10 years in the face of the possibility of greener alternatives, the looming taxation of transport modes, or the priorities of governments to deliver on their "green" pledges.
For Angel García Butragueño, Co-Director of the Tourism Barometer, and Director of Tourism at BRAINTRUST, "While we were hibernating due to the pandemic, the world has changed at a dizzying pace behind our backs. The COVID 19 crisis has left us with great lessons, which, together with the acceleration of the trends outlined above, will impact both positively and negatively on the business travel industry, leaving us with a more aware business and traveller. This, along with other major factors such as full digitalisation, would mean that pre-pandemic levels would not be reached again for a few years. But a more conscious business travel is coming from 2025 onwards, which will once again become the driving force of a new green economy, whose model is more sustainable and to which all actors in the tourism value chain will have to adapt.Theconcept that we have been communicating for some time at BRAINTRUST of the 3 P's takes centre stage, People, Profit & Planet, taking care of employees, the bottom line and the planet at the same time, an approach where sustainability is the goal".
Business travel agencies face their best opportunity in years
The report foreshadows a boom in travel agencies specialising in business travel, in an uncertain environment where traveller safety, cost efficiency and care for the planet are the new mantra.
Only agencies will be able to play the role of guarantor that companies are looking for, providing through their knowledge, experience and tools, the best integrated and automated options.
The coming years could see a fierce struggle between the different suppliers, eager to recover the income lost during the pandemic, to take over direct sales by encouraging disintermediation. However, the increased complexity of organising business travel at both the individual and group level in the future augurs an increase in intermediation, with agencies taking a share of close to 60%, to the detriment of the direct channel, converting today's business travel into a business of mobility and corporate communication. Meanwhile, airlines and hotel chains will have to reflect on their business models, where business travel accounted for a small part of their total share of travellers, but a large part of their revenues.
For José Manuel Brell, Co-Director of Barómetro Turístico and Partner in charge of the Quantitative Studies and Models practice at BRAINTRUST: "Business travel has reached a turning point in the face of a new society that has changed after the pandemic, emerging with different social values, and that extends to the Boards of Directors of companies and with it to the stock markets where not only profits, but the purposes and the way in which the objectives are reached, among which will be a more responsible social agenda, will take precedence. Travel awareness is taking centre stage and is here to stay, and in this context, specialised agencies have a lot to say, they will take a new path of transformation and reinvention, but they will be the winners in this new situation. Business travel has changed its physiognomy forever, and this will mean great opportunities for those industry players who know how to anticipate the new times, like those we are helping in this new path of the future.”.