About 96 percent of companies have canceled and/or suspended "all" or "most" international business travel regardless of location, due to the coronavirus pandemic, according to a Global Business Travel Association membership survey released Tuesday. About 85 percent reported they have canceled or suspended "all" or "most" domestic business trips.
GBTA polled its buyer and supplier members between March 18 and March 21, receiving 1,155 responses. Forty-six percent of respondents were travel managers, 7 percent were procurement or sourcing professionals, 32 percent were suppliers, 9 percent were travel management companies and seven percent other categories.
For trips to China, Hong Kong, Taiwan and other Asia/Pacific countries, at least 97 percent of companies reported they have canceled or suspended “all” or “most” business trips. For Europe and the Middle East/Africa region, 96 percent and 95 percent of companies reported they have canceled or suspended all or most business trips. For Latin America, Canada and the United States, 92 percent, 89 percent and 85 percent, respectively, reported all or most business trips canceled or suspended. Respondents estimated 89 percent of business trips previously booked for March 2020 have been canceled.
Measures Companies Have Taken
According to the GBTA survey, 41 percent reported their company has canceled or suspended all business travel regardless of location, duration or purpose, while 53 percent report their company has canceled or suspended all non-essential trips but allowed some essential travel.
"All of Snap is now virtual until further notice," said Snapchat global travel manager Sean Parham. "All international travel is canceled, and only essential domestic travel is allowed until further notice."
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"We've shut down travel globally," said ZS Associates travel operations manager Suzanne Boyan. "We have folks on either end of the spectrum: There are some who are begging to go back to the office and want to travel, and others that are freaking out," she said. "We decided to err on the side of caution, so we said no travel and everyone work from home."
About 85 percent of companies surveyed by GBTA have instituted work-from-home policies, 79 percent have provided updated health and safety information to employees, 70 percent are developing contingency plans to get work done, such as increasing tele- and videoconferences. Fifty-nine percent limited the number of people who work in the office.
"Our office fully supports the quarantine and sent everyone home March 16," said Sonepar USA travel and expense manager Tricia Mauldin. "They took their laptops and all office supplies and equipment they wanted, even their office chairs."
According to Emburse, average spending among corporate clients on expenses related to working from home grew exponentially in early March. That average spend has already exceeded $84,000 between March 1-16, up from around a $4,000 monthly average from 2014 through February 2020. The biggest share of those expenses were for lunch and meals (33 percent) and computer monitors (25 percent).
At Sonepar USA, travelers followed the travel guidance of their local government and their destinations, said Mauldin. "There was never a specific travel ban announcement made by Sonepar," she added. "Common sense and respect for the situation is what brought our travel to a halt."
Snapchat has postponed "pretty much all our meetings and events through June," said Parham. Snapchat is not alone: GBTA found 95 percent of surveyed companies had canceled and 92 percent had postponed meetings, conferences or events due to the coronavirus outbreak.
Airlines: Save Us, Government, Before It's Too Late
The commercial aviation industry continues to suffer financially. The International Air Transport Association has revised its estimated revenue loss caused by the Covid-19 pandemic. On March 5, IATA estimated a $113 billion year-over-year loss in 2020 passenger revenues, but that was before widespread government-imposed restrictions on travel. IATA now estimates global airline industry 2020 passenger revenue could plummet by $252 billion from 2019, a 44 percent drop. This is in a scenario in which severe travel restrictions last for up to three months, followed by a gradual economic recovery later this year.
Some carriers now are flying cargo or repatriating people. "Where international passenger traffic is allowed, we are mostly repatriating people to their home countries as governments permit," IATA director general and CEO Alexandre de Juniac said in a statement. "And we are also delivering vital goods—medicines and equipment to fight the virus or the most time-sensitive products feeding global supply chains."
IATA has been lobbying governments to provide financial relief. "A liquidity crisis is coming at full speed," de Juniac said. "Revenues have fallen off a cliff. And no amount of cost-cutting can save the day if no cash is coming in the door. Without financial relief airlines will go bust."
The association is calling for direct financial support; loans, loan guarantees and support for the corporate bond market by governments and central banks; and tax relief.
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IATA said Singapore, China, Hong Kong, Australia, Brazil, New Zealand, Qatar, Colombia, Sweden, Denmark, Norway, and Finland have provided government assistance. The association expects the European Central Bank and the United States Congress to approve aid soon.
Uncertain About the Future
Seventy-three percent of GBTA member companies described the financial impact of the coronavirus as "significant," and 19 percent said the impact was "moderate." GBTA supplier members reported a very strong financial impact, with 94 percent describing the financial impact of the coronavirus as being “significant” to their company’s revenue.
Expectations vary for when business travel will resume. Among those respondents whose companies had canceled or postponed business travel, 40 percent said they expect travel to resume within the next three months, and another 17 percent expect it do so within in six months. Another 40 percent said they are unsure when travel will resume. "We hope that by [restricting travel] now we can all get back to business as usual much sooner," Boyan said. "We’ll see. I just hope the industry can pull through."
According to the GBTA survey, 54 percent of respondents said the coronavirus pandemic will change the way they do business once the threat ends, while 23 percent said it won't and 22 percent said they don't know.
For now, companies are making do with doing business virtually, and it'll be tough for a lot of their travelers. "Sonepar has upgraded office space across the country over the last four years with rather elaborate virtual meeting features, but our people prefer in-person meetings," said Mauldin. According to the GBTA survey, 75 percent of respondents reported hosting virtual meetings as a result of the Coronavirus outbreak, while 18 percent host virtual meetings occasionally.
The greater reliance on virtual meetings is not an issue for Snapchat. "Virtual meetings are already part of the company culture here at Snap for internal meetings," Parham said. "The current world situation has just made this the only way we are meeting now, including client meetings."
Parham, for one, hopes his travelers replace their non-essential travel with virtual meetings even after the current crisis. "I have always been a fan of virtual meetings to avoid non-essential travel to lessen the impact on the environment," he said. "I know that does not sit well with my airline and hotel partners, but it is the hard truth. I am hopeful that a lot of companies will see the value in virtual meetings moving forward."
Sonepar's travelers are itching to get back on the road, especially the road warriors, said Mauldin. "I know my Sonepar travelers," she said. "They will begin planning trips as soon as quarantines are lifted. Some people are just born to fly to work and pay mortgage at a house they only see during vacations and holidays."