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Companies Pumping the Brakes on Return to Travel

By Adam Perrotta / August 26, 2021 / Contact Reporter
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The return of corporate travel is hitting some speed bumps, with new signs this week indicating that concerns over the lingering Covid-19 pandemic are causing companies and travelers to re-evaluate plans to return to the road. 

Released today, the latest edition of the Global Business Travel Association's monthly global survey of travel professionals, aimed at gauging the industry's pandemic recovery, revealed significantly reduced momentum for the return of corporate travel in the near term. The current iteration of the poll, conducted between Aug. 9 and Aug. 19, garnered responses from 678 travel buyers and suppliers in the U.S. and Canada, Europe and Latin America.

The survey found that just 40 percent of companies that had ceased domestic travel planned to resume in-country trips within the next one to three months—down 36 percent from the previous poll, conducted a month earlier. Enthusiasm for taking up international travel also was on the wane, with just 18 percent of companies that had suspended crossborder trips planning to resume such travel—down exactly 33 percent points from last month's survey. 

Crossborder Travel Lag Not Just a Health Issue

Not only are plans for domestic travel slipping as the delta variant takes hold, the long wait for crossborder traffic--which has yet to stage a significant comeback--may get even longer. Neither the virus, nor the variant is the only obstacle.

“Fragmented rules and a lack of mutual agreements continue to restrict travel, with travel restrictions being the second biggest deterrent to travel for 55 percent of respondents in a GlobalData poll," said the research company's associate travel and tourism analyst Gus Gardner, whose poll surveyed all types of travelers, not just business. 

“Travelers have been left confused over how to provide their vaccination status with varying rules across destinations. For some destinations, travelers need to jump through several hoops to prove their status, and if traveling to numerous countries, the process often differs. Even though it appears restrictions have eased, the complexity of proving vaccination will continue to be a barrier.”

Gardner continued by calling proof of vaccination an "afterthought" of the vaccine rollout, and the lack of digitalized records in some countries--including the U.S.--will continue to make proving vaccinated status difficult. Though options are available, like the International Air Travel Association's travel pass and others, the uptake has been poor and there is limited government integration.

 “Unless steps are taken soon, it could potentially suppress international demand as rules could be too difficult to understand and destinations’ recovery may stall as a result,” said Gardner. 

The GBTA study also offered some grim insights from suppliers, with 31 percent of respondents who worked for an air, hotel or ground transport company reporting that bookings from corporate customers had decreased over the previous week, while just 24 percent had seen an increase in corporate sales over that period. That was a stark reversal from the previous poll, in which just 3 percent of suppliers had seen fewer corporate bookings and 70 percent reported a rise. 

New data from the Airlines Reporting Corp. further bears out the recent slowdown in corporate bookings. ARC reported that corporate air ticket volumes have been dropping significantly over 2019 levels during the past few weeks. The seven-day period ending Aug. 22 saw 63.5 percent lower volume that the same period two years ago, continuing weaker sales from the previous week, during which volume was down 62.4 percent from 2019. Those figures were a sharp drop-off from late July and early August, during which volumes were down an average of just 55.3 percent compared to 2019.  

Employee enthusiasm for returning to travel also is on downward trajectory, according to the latest GBTA study, in which 10 percent of travel manager respondents felt that their company's employees as a whole generally were unwilling to travel. In the prior GBTA poll, just 4 percent of managers reported such overall sentiment from their employees. 

Within the context of Covid-related concerns, the rise of the delta variant of the virus—which has been found to be carried by some fully vaccinated people—has been particularly worrisome for the travel ecosystem as a whole. In the GBTA survey, 78 percent of all respondents were concerned or very concerned about the potential effects of the delta variant—and the possibility of further variants—on the safety of business travel. Meanwhile, 78 percent were concerned or very concerned about the variants' effect on sector employment and 85 percent feared the potential effects of variants on supplier revenue.

In public comments on Wednesday, American Airlines chief revenue officer Vasu Raja warned that the delta variant was hindering the carrier's August revenue and projected a muted corporate travel recovery over the coming months.

"This has been, and we expect will continue to be, a very choppy recovery," said Raja. “We do anticipate that there will be a … slower recovery in business demand than what we’ve seen," he added. 

American's warning of revenue constraints stemming from the delta variant followed similar notices made recently by Southwest Airlines, JetBlue, Spirit Airlines and Frontier Airlines.

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