Despite many companies’ expectations, business travel spend is at least two years from reaching pre-pandemic levels, according to a new study.
Deloitte’s Reshaping the Landscape: Corporate Travel in 2022 and Beyond study reveals that business travel spend is projected to reach 36% of 2019 levels in the second quarter of 2022 and, by the end of the year, 55% of 2019 levels. By the end of 2023, business travel is expected to reach 68% of pre-pandemic levels.
COVID variants have contributed to the extended timeline, with two-thirds of survey respondents (66%) saying Delta and Omicron caused them to push back travel timelines.
Travel restrictions and employee unwillingness to travel also contribute, as do concerns about travel prices.
“Business travel seemed to be ready for takeoff last summer, but the emergence of COVID-19 variants quickly grounded plans - as a result, leaders are more conservative in their estimates for business travel’s recovery,” says Mike Daher, vice chair at Deloitte and U.S. transportation, hospitality and services non-attest leader.
“While many of us are eager to see our co-workers, clients and associates in person, technology platforms have made it possible for most businesses to not just continue their operations from afar, but thrive in doing so. Combined with workplace flexibility that shows no signs of going away, businesses are reassessing and reprioritizing when and why employees travel - which can create a suitcase full of new opportunities for organizations to evolve and grow.”
Work from home
Companies’ work-from-home policies are also impacting how and when employees travel for business. For companies that are work-from-home dominant in Q2 2022, 36% expect their corporate travel spend to recover to 2019 levels by the end of 2023. On the other hand, 71% of office-dominant companies say travel spend will recover by the end of next year.
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As a result of flexible working arrangements, one in four respondents expect more trip to company headquarters, despite less frequent travel overall.
Meanwhile, short-term rentals – billed as places that offer more space amid the pandemic – have not become a mainstay of corporate travel programs.
Only one in 10 companies included non-traditional lodging in their corporate booking tools. About half (49%) of companies do not reimburse employees for non-hotel lodging.
According to the report, the decline in corporate travel throughout the pandemic helped companies realize significant gains toward their sustainability goals, and their bottom line.
In turn, business leaders are weighing the expense and carbon emissions involved, as well as the ability of technology to replace the need to meet in person, as they evaluate which trips employees should take.
One third of travel managers (35%) say their companies have pledged to reduce carbon emissions by a specific amount within a certain time period, impacting when and how employees travel.
Most respondents expect sustainability to reduce their 2025 travel spend by 10% or less, while nearly three in 10 expect a reduction of from 11% to 25%.
On the supplier side, nearly one in three travel suppliers are looking for guidance from travel management companies on how to reduce their carbon footprint. Meanwhile, one-quarter of travel managers say they will prioritize travel suppliers that invest in sustainability.