84 percent of respondents to a Bloomberg News survey of CEOs and other senior executives at large companies in the US, Europe and Asia will spend less on travel after the pandemic. Such a scenario would be felt by companies known to be dependent on business travel such as SAS and Scandic.
Business travel as we know it is ”changed forever,” according to the news agency’s interpretation of signals from company executives. They claim that the communication tools that have been tweaked to keep businesses running have enabled such huge time savings that no one really longs for a return to business travel.
45 major companies, including Pfizer, LG Electronics, Deutsche Bank and Akzo Nobel, participated in the survey.
”"Travel to ramp up business can be reduced by a third and internal meetings by even more. It's good for the bottom line and contributes to our sustainability goals. Our customers have now had a year to train, so it is no longer socially unacceptable to only have contact via video link. This will be a huge efficiency tool," said Thierry Vanlancker, CEO of chemical company Akzo Nobel.
The majority of managers in the survey predict that business travel budgets will decrease by between 20 and 40 percent, with the clearly dominant median response being "up to 30 percent" in reductions.
The survey results find also supported by the industry organization Global Business Travel Association's forecasts, which predict that business travel costs will decrease from a peak of $1.43 trillion in 2019 to $1.24 trillion in 2024.
Those who want to start traveling again will not only face resistance in the form of cost savings to overcome. In general, the reduced travel has not resulted in any overwhelming chaos for companies' business operations, according to the survey responses.
”"Companies are looking at their bottom lines, climate commitments and at the same time have employees whose wishes for a more flexible working life are being heard and thinking: Do we even have to go back?" said the global head of travel and leisure at consulting firm KMPG.
However, some companies will be negatively affected – those in the travel and entertainment industries in particular. The pandemic has already been devastating for them, for example in the airline and hotel industries. Airlines' losses totaled $126 billion in 2020, and in 2021, the lobby organization Air Transport Association predicts further losses of $48 billion. Many companies, whose debt levels have grown exponentially during the pandemic's often government-funded rescue measures, are dependent on the return of business travelers.
Sydbank's aviation analyst Jacob Pedersen has repeatedly warned that SAS is one of the European airlines with the greatest exposure to business travel.
”"We also expect that business travelers will travel significantly less in the future and that it will cost SAS revenue of SEK 5-8 billion per year, and then the current savings program of SEK 4 billion per year will not be enough," Sydbank wrote in an analysis early in 2021.
Several research houses have also warned about the hotel company. Scandic exposure to business travelers.
However, at the same time, several voices are being heard from industries that depend on travelers, claiming that the rumor about the death of business travel is greatly exaggerated.
”Many of our corporate customers say they will immediately return to business travel the day they lose a customer because they were not face-to-face,” Air France-KLM CEO Ben Smith told Bloomberg News.
Source: Nyhetsbyrån Direkt
