In the early months of the pandemic it was the companies that helped us work from home that secured big gains in the financial world, as well as those that helped keep consumers entertained.
Zoom, Netflix, Peloton and food delivery companies were among those that gained ground while travel stocks fell to all time lows.
At one stage, in October 2020, Zoom’s market capitalization of more than $150 billion was greater than that of the combined market capitalization of 15 of the largest airlines in the world.
At the time many questioned whether business travel would ever come back to 2019 levels, with some, such as Microsoft’s Bill Gates, saying as much as 50% of business travel was gone for good.
Accor CEO Sebastien Bazin also predicted a permanent decline in business travel because services such as Zoom “just work.”
In August of 2020, the boss of the France-based hotel giant said he expected business travel to remain down 10% but felt the shortfall would be made up from other activities.
Fast forward to today and Bazin still believes business travel is not coming back to the same levels as before the pandemic started.
In Accor’s full-year 2021 earnings call he said a 20% decline in business could “probably last forever” citing the ease of jumping on a video call versus the increasing hassle of traveling across boarders.
Others remained more upbeat believing business travel would come back because of the need to do deals face-to-face as well as the drive for corporate innovation.
And, maybe there’s light at the end of the tunnel.
Airlines are reporting increases in long-haul bookings and can see a return to profitability in the next few months.
In its latest Travel and Tech Mobility report (TNMT), Lufthansa Innovation Hub (LIH) looks at where technology companies are now versus travel stocks.
It says: "With the world slowly reopening, and companies and people returning to some of their old habits, from making travel plans to going to the office, the outlook across the virtual services board is changing.
“2022 now looks like a judgment year, a year of determining whether these virtual-tech companies have gotten ahead of themselves, or whether they will find a sustainable product-market fit in an environment that is worlds away from the one we experienced during lockdowns and travel bans.”
TNMT looks at the share price of large travel companies which are recovering compared to large technology companies whose growth is slowing with some of which have “lost their pandemic gains.”
Another plus for the travel industry, it adds, is that while the travel industry has spent the past two years making itself leaner and more efficient, many of those big technology companies have still to go through that pain.
Lufthansa's innovation arm is right, in all likelihood 2022 will be a judgement year in who wins the travel versus technology race and how far the world remains virtual but no one will be writing off big tech and its ability to adapt and thrive just yet.