Business and group travel are expected to begin a slow return in the second half of 2021, after the Covid-19 vaccines are more widely available, with full recovery not anticipated until 2024, according to the American Hotel & Lodging Association's State of the Hotel Industry 2021 report, released Thursday.
Business travelers, however, are driving the return of leisure travel—widely believed to be the first segment to recover—as they expressed greater comfort in traveling for any reason compared with adults overall, according to a Jan. 7-9 survey of 2,200 U.S. adults, included in the report.
Forty-two percent of frequent business traveler respondents indicated that they already are comfortable staying in a hotel, while 52 percent said their comfort is connected to vaccination, according to the poll. Sixty-two percent of frequent business travelers expect to travel more for leisure and 51 percent expect to travel more for business compared to last year.
Only 5 percent of all adult respondents said they had taken zero business trips pre-pandemic, but that number jumped to about a quarter in 2020, and it is anticipated to stay there for 2021.
Employer Input
Employers will play an important role in helping to revive business travel, according to the report. In another poll for the report, conducted Jan. 7-12 of 400 U.S. adults who traveled five or more nights for business in 2019, 37 percent said their employer has completely halted all business travel. Another 34 percent said their employer has reduced business travel for all employees, while 16 percent said their employer has reduced business travel for some employees. Just 13 percent said business travel is continuing at the same rate as before the pandemic.
Among those respondents whose employer has halted or reduced business travel, 21 percent expect it to resume to pre-pandemic levels in the first half of 2021, 26 percent in the third quarter, 16 percent in the fourth quarter, and 29 percent sometime after 2021. Another 7 percent do not expect business travel to ever resume pre-pandemic levels.
Group Recovery
STR's Hotel Business Travel Outlook, published in December 2020, forecasts group demand through April 2021 to decline 85 percent compared with 2019 levels, then begin to increase slightly to a 75 percent decline in May 2021. The second quarter of 2021 will see essential meetings and small to medium events begin to be held, but larger events won't start to recover until the third quarter, after vaccine distribution is more widespread, according to the report. By the fourth quarter of 2021, group demand is expected to be down 23 percent from fourth-quarter 2019 levels.
Among frequent business travelers who currently are employed, 29 percent expect to attend their first business conference in the first half of 2021, 36 percent in the second half of the year, and 20 percent more than a year from now.