Zoom Meetings Could Replace Business Travel – How That Could Affect You
A recent Bloomberg survey of 45 large businesses across the world found that 84% plan to spend less on business travel in the post-pandemic era. Companies such as Michelin, Pfizer, LG Electronics Inc. and European paint manufacturer Akzo Nobel NV reported a reduction in business travel due to new communication tools, including but not limited to, video conferencing platforms such as Zoom.
This could mean an end to large-scale conventions, as well as in-person shareholder meetings and other networking opportunities, factory tours and one-on-one meetings with top clients and stakeholders. For busy executives like David Pinselaar at Akzo Nobel NV, it means fewer flights and less jet lag. He can visit 124 manufacturing plants across the world via a sophisticated, high-definition augmented reality setup in less time than it takes to fly to one site. Akzo Nobel NV CEO Thierry Vanlancker is impressed by the increased productivity and reduced costs.
“Trips to drum up business could drop by a third, and internal meetings by even more,” Vanlancker told Bloomsberg. “It’s a good thing for our wallets and helps our sustainability targets. Our customers have had a year of training, so it’s not a social no-no anymore to just reach out by video… There’s an enormous efficiency element.”
Like Vanlancker, most executives said they see their travel budgets being slashed by anywhere from 20% to 40%. The bulk of those cuts, Bloomberg reports, could come from internal meetings. For instance, Deutsche Bank told Bloomberg that client-related travel will probably return to “about 90% of pre-pandemic levels,” internal meetings may stagnate at about 25% to 30% of their prior budget.
Similarly, 23% of Morgan Stanley corporate travel managers said that travel is not likely to return to pre-pandemic levels, Bloomberg reported.
What the Travel Experts Say
The travel industry, likewise, is not optimistic about a return to pre-pandemic-style globetrotting amidst top companies.
The International Air Transport Association told Bloomberg that it believes business travel could be the last sector to fully recover. The Global Business Travel Association forecasts business travel reaching $1.59 trillion, on the high end, by 2024, and just $1.24 trillion on the low end. These figures stand as a contrast to 2019’s business travel spending of $1.43 trillion, showing that even if the industry grows, it won’t be growing at the same pace it was pre-pandemic.
How Will This Affect Workers and Executives?
A study commissioned by the SAP Concur organization this spring found that 96% of global business travelers were willing to resume trips over the next 12 months, and 65% said they are “very willing.”
The majority of business travelers have some fear of missing out tied to a lack of trips, with 80% believing their professional lives and career opportunities will suffer without travel and an equal number saying their personal lives will suffer. According to the survey, 54% of workers said they like making personal connections with customers and colleagues, 52% like “experiencing new places” and 41% just enjoy the chance to take a break from everyday life.
However, if employers have their way, the vast benefits of a reduced carbon footprint and cost savings, not to mention increased efficiency through virtual meetings, will win out. After all, employees are already accustomed to connecting via Zoom and other technologies, so there’s not the same learning curve we faced at the beginning of the pandemic. Travel managers and executives can more carefully choose the trips that are most important and relegate everything else to video conferences or even augmented reality interactions like Akzo Nobel NV has adopted.
Will This Affect the Way You Travel for Leisure?
While workers may miss opportunities to enjoy happy hour in Las Vegas with clients or take a side trip to Disney World during an Orlando convention, the airline and hotel industry is likely to be the hardest hit by the changes.
Pre-pandemic, business travelers brought in roughly 75% of an airlines’ profits while filling only 12% of the seats, Bloomberg reported from PwC research. Airlines lost $126 billion in revenue in 2020 and could lose as much as $48 billion in 2021, says the International Air Transport Association.
Likewise, hotels draw about 66% of their revenue from business travelers and could lose as much as 18% revenue going into 2022, according to a Morgan Stanley study from this summer.
This could result in fewer flights, reduced amenities and higher costs for leisure travelers as airlines and hotels attempt to make up the lost revenue. Some hotels are already experimenting with ala carte services, much like many airlines now charge for luggage, in-flight wifi and food service.
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