Workplace changes precipitated by COVID-19 are clearly influencing the definition and pace of the anticipated business travel rebound. A stunning number of employees now work from home, many will not return to the office—and the cascading impact presents both challenges and opportunities for managed travel.

Confluence with Momentum: Global Reduction in Urban Office Space

Several factors have come together to present us with the picture we face today. To summarize:

• As reported this month by the Washington Post, “Fewer than 28 percent of those employed in the nation’s 10 biggest business districts, including Washington, New York, Chicago and Los Angeles, were at the office the first week of January.”
• Commercial real estate giant CBRE reported in November that the U.S. downtown office-vacancy rate (16.3 percent) is “as high as it’s been since 1994.” Corporate CFOs are taking steps to leverage the average reduction of 30 percent in long-term corporate real estate investments now left empty.
• The delta and omicron variants, striking months apart in 2021, have left millions of “return to office” plans in the shredder. The persistence of the pandemic extended the work-from-anywhere  “trials” into relative permanence with employees old and new. Vaccine hesitancy and dilemmas with mandates also impact discussions around when and how to open offices that remain.

The Acceleration of Digital Empowerment: Leveraging Learnings in Employee Productivity

And when it comes to WFA, employees have mostly liked the change and want to adopt it. Stanford University research published in 2021—titled Why Working from Home Will Stick—detailed findings from a survey of 30,000 American workers. From the report: “Nearly two-thirds of respondents and nearly 80 percent of those able to work from home want to do so at least one day per week. About 30 percent want to work from home all week.” 

This WFA employee mindset is something more organizations are having to take into account as they fight to acquire and retain talent in the face of trends like the Great Resignation. As the CEO of Ladders, Marc Cenedella, shared in that same Washington Post article, “If you want to grow your business in 2022, if you want to hire, you have to hire out of office.” 

Many companies that have endured the accelerated WFA transition see similar-to-better productivity and staff happier with better work-life balance. This is not new: Stanford research from 2015 found that employees taking part in a WFA trial were 13 percent more productive. When those trials became permanent, productivity came in at 22 percent higher than before the initial trial. 

Mix in greater productivity, real estate savings, and staff that is acclimated to the tools and habits of WFA, and companies can see the whole picture as perhaps the best thing emanating from COVID-19. GitLab, a company highlighted in the Harvard Business Review for its approach to WFA, estimated the net benefit to be $18,000 per year per employee.

Of course, many C-suite executives are predictably concerned about collaboration and culture drawbacks. Deloitte’s “Return to Workplaces” survey of 275 executives found 32 percent concerned about maintaining culture, 26 percent about maintaining high performance and 19 percent about collaborating effectively. 

From Challenge to Opportunity: A Scenario for Redefined Corporate Hotel Programs

The old cliché about opportunities arising from difficulties applies here, particularly for hotels seeking new revenue avenues on the road to recovery. Some changes in travel patterns are already apparent; HRS has seen the average length of stay grow dramatically for clients that have gone back on the road. Forward-thinking hotels have been quick to grasp this trend, altering rooms, amenities, public work areas and dining options to accommodate longer stays.

The need to bring together WFA employees with leaders and peers is already driving new conversations between buyers and hotel suppliers. Drafts of “recurring collaboration sequences” and “hub to hub meetings”—quarterly or even monthly—are being jointly developed by transient and meeting procurement leaders at companies across all vertical markets. 

And where are these companies likely to hold these “collaboration events?” Their preferred hotel partners, with established relationships and a keen understanding of service preferences, have the inside track. The ongoing pandemic, along with yet-to-be-determined frequencies that companies will develop along the way, makes it hard to project the volume of this new “segment,” but it doubtlessly holds tremendous promise to support corporate lodging’s recovery. For example, historically large events may get replaced by smaller physical gatherings of digitally-connected hybrid hub groups. 

HRS is not alone with this forecast. One award-winning buyer told Business Travel News that “bringing internal employees together is going to be a lot more important than it was before. I think we’ll see a renaissance for hotels.” A leading consultancy concurred: “You may need to get teams together five or six time a year. Maybe that means you are going to source your programs differently in the new remote work environment.”

Accordingly, look for streamlined automation and technologies to support this need for flexibility and “collaboration and culture” events. We foresee a broader mesh of preferred and audited suppliers, working with buyers and technologies that provide an integrated channel to procure, book and reconcile all types of travel, regardless of category. These tools—including secure payment—are being refined already. And with the confluence of all the long-term factors described above, these investments will continue beyond 2022 as the lodging ecosystem supports larger workforce and workspace trends.