Sunday , September 26 2021

Business travel is not expected to return to pre-pandemic levels soon



Kacey Siskind recently made her first business trip to the U.S. since the pandemic began.

The vice president of business development at Honk Mobile, a parking app, attended an industry conference in Texas.

“Our team was completely vaccinated and we felt like we could probably make our way and see how it was going … we just wanted to take a risk and go out into the world again,” Siskind said.

But in Dallas, you would hardly know that there had never been a global pandemic. The roundtables and networking sessions of the conference took place inside with no masks in sight, just a lot of people wanting to reconnect.

Siskind said he found the environment disturbing at first, but soon began to appreciate the experience.

“There’s really nothing like being in person with someone,” Siskind said. “There’s nothing like seeing them physically and talking to them.”

The Global Business Travel Association, an industry group, said business travel accounted for between 2.5 and 3% of Canada’s pre-pandemic GDP, about $ 40 billion annually. (Rick Bowmer / The Associated Press)

Only essential business travel has continued throughout the pandemic; for example, travel related to health problems or critical infrastructure. Business trips related to maintaining or building relationships, conducting sales, or attending conferences had been closed.

In an online survey of 640 industry professionals, a June survey by the Global Business Travel Association, an American industrial group, found that 91% of companies claim to have canceled or suspended most or all international business trips. the industry.

Slow return of business travel to Canada

In Canada, online virtual meetings are expected to be the norm until at least the end of the year, according to event organizers.

“Our friends from the states move a little faster than we do,” said Anh Nguyen, an event organizer in Calgary. “In Canada, we see a more conservative approach.”

Canadian Kacey Siskind, vice president of business development at Honk Mobile, recently traveled to Texas to attend her first personal industry conference since the pandemic began. (Submitted by Kacey Siskind)

Nguyen’s company, Spark Event Management, hosted several virtual events over the past year. He believes that many organizations, here and in the United States, will not be willing to give up all the benefits of online connection.

“There’s nothing sold out, right? So if you’re a 300-person event, you can now reach 5,000-6,000 people if you want to.”

Nguyen adds that with avatars, networking, and meeting room programs, the industry is approaching the possibility of replicating much of an online real-life event experience, though it will never be the same.

“Technology has grown and now there is a lot of money and investment in event technology,” Nguyen said.

Event manager Anh Nguyen of Calgary thinks face-to-face events will continue to have a virtual presence for the foreseeable future, as many companies seek to reach a wider audience. (Dave Rae / CBC)

Virtual meetings can be great in some ways, but industry experts point out that they do almost nothing for local economies. Business travelers often spend large expenses. They often have expense accounts, which benefit hotels, restaurants, taxis, airlines and more.

“Business travel contributes more than $ 40 billion to our Canadian economy in pre-pandemic numbers,” said Nancy Tudorach, who works with the Global Business Travel Association. “It’s 2.5 to 3% of our typical pre-pandemic GDP.”

Airlines hurt

Vik Krishnan, a consultant for McKinsey & Company, said airlines rely in particular on expensive business-class tickets.

“The business traveler tends to book late, usually travel more often and also buys some of the more expensive fares,” he said. “The business travel of some airlines accounts for 50 to 75% of profits.”

A recent McKinsey report noted that it took six years to recover airlines from the impact of the 9/11 attacks and that the industry had not yet fully recovered from the 2008 global financial crisis when it arrived. the pandemic.

The COVID-19 pandemic has been bigger and deeper than any of these previous crises, Krisnan said. But if corporate travel continues to be reduced, he said airlines are unlikely to offset regular consumer billing.

Ontario-based TK Events is one of several event management companies that virtually replicates some aspects of real-life conferencing. (TK Events)

“It’s an industry that has faced a lot of competition, has faced relatively relentless pressure on prices and cost pressure, and so it’s not uncommon to have to deal with an environment where you don’t have much leeway. maneuverability and flexibility to raise prices. “

The recent emergence of new discount airlines in Canada, such as Flair and Canada Jetlines, could make it harder for WestJet or Air Canada to charge more.

Business travelers may be depressed

It is expected that many of the companies that rely heavily on business travelers will continue to struggle. McKinsey’s report on the airline industry predicts that pre-pandemic travel levels will not be reached until 2024 and will even only stand at 80%.

Others say the pandemic may have forever changed the focus of corporate travel.

Kacey Siskind suspects that all business trips will be evaluated differently.

“Is it efficient to go to a conference? Yes, if we see hundreds of people, it will make sense for us to be there,” he said. “Is it smart for me to go to New York to spend a night having a meeting? Maybe not so much.”


Source link