If you’re a former airline passenger and haven’t taken a business trip in years, keep staying there. Business travel decreased in 2020 and 2021, and it no longer exists.
Hotel travel revenue in the United States for 2022 is expected to be 23% below pre-pandemic levels, according to an April report from the American Hotel and Residence Association, or AHLA, conducted with hotel analytics group Kalibri Labs.
And it’s not just the hotel’s declining revenue. Research by the American Travel Association, a non-profit organization representing the travel industry, estimates that total business travel spending will decline 24% in 2022 compared to 2019 levels.
the look
Some cities have been hit harder than others. AHLA has released forecasts for business travel revenue for 2022, and four major US cities — San Francisco, New York, Washington DC, and San Jose, California — are expected to see more than 50% decline in revenue compared to 2019. San Francisco is particularly hard hit, with a drop in revenue. By about 70%.
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Percentage difference in business trip revenue projected for 2022 vs. 2019 |
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When will business travel return?
The American Travel Association estimates that domestic business travel will not recover to 2019 levels until 2024, and is only expected to reach 76% of its 2019 levels this year. International business travel may take longer to recover (up to 2025), and is only expected to reach 72% of pre-pandemic levels in 2022, according to WHO projections.
For what it’s worth, there are more business trips happening now than in 2020 or 2021. The business travel landscape in 2022 differs markedly from the pre-pandemic years. These days, there are fewer people attending conferences and in-person meetings with clients. But there is an increase in other types of business trips.
Team travel, where multiple employees on the same team meet at an event or off-site, rose more than 900% between January and May 2022, according to corporate travel agency TripActions.
TripActions data also shows an increase in the number of travelers per company. Whereas previously, few employees traveled constantly for sales meetings and conferences, now more employees travel at least once for their jobs. A TripActions spokesperson told NerdWallet that while in 2019, engineers made up 9% of bookings, these days they make up 13%. Meanwhile, salespeople previously made up 51% of bookings, but now only make up 45%.
TripActions data also shows that the number of team bookings made was 7% higher in April 2022 versus the pre-pandemic peak in 2019.
Changes in Business Trips: Good or Bad for Leisure Travelers?
The decline in business travel (and its slow return) comes with its pros and cons for leisure travelers.
Cons: Fewer chances to accumulate loyalty and prestige points
For some, personal travel is fully or partially funded by points earned through business trips.
Business travel can also provide opportunities to earn levels of elite status that a person would be unlikely to achieve through leisure travel alone.
Spend five nights a month in a hotel for a counseling party, and that’s enough to earn you a world-class living status. This, in turn, matches MGM Rewards Gold status, unlocking valuable casino-focused hotel chain benefits such as waived resort fees, which can save you hundreds of dollars on your Las Vegas vacation.
How to use this to your advantage: You may not be able to collect many points and miles by working, but many brands have made it easy to earn or maintain status. Take a closer look at the loyalty programs you belong to because you may be much closer to earning elite status than you thought. If you only have one or two nights or less in case of flights, paying to run a mattress may still be worth it.
Pros: Less competition with business travelers over availability
For Tim Leffel, editor of online travel magazine Perceptive Travel, less competition for seats from business travelers has opened up more bargain opportunities.
“As a leisure traveler, I was very happy to see the slow business trips coming back, as it means more opportunities to buy business class seats at a good price,” he says. “During the pandemic, I ended up buying several business class tickets between Mexico and the United States.”
Meanwhile, airlines typically offer upgrades based on elite seniority. While a frequent business flyer may have a very high elite status, a leisure flyer with a low level of elite status may eventually be granted a first class upgrade.
How to use this to your advantage: Consider credit cards that automatically offer elite status. Even if it’s not necessarily the highest standard, you probably aren’t now competing with as many business travelers as usual. (And business travelers are more likely to enjoy elite status than leisure travelers.) With fewer business travelers, you have a better chance of getting an elite status upgrade than in years past.
Cons: Lack of business trips may be the reason for the high prices
Some indications are that business travel is actually what makes leisure travel cheaper, in part because more business trips mean more routes are available overall. For leisure travelers, more routes mean less need to stop or fly at unwanted times. Business trips also tend to generate more revenue for airlines as these fares tend to be booked last minute, have more flexible cancellation policies, or are in a higher class of service (or a combination of the three).
How to use this to your advantage: Head to destinations that usually rely on business travel. While San Francisco is still expensive, it may be less expensive in 2022 than in 2019 due to lower demand for business travel.
bottom line
Business travel is slowly making a comeback, but it’s far from a complete comeback. The return of commercial travel will likely take years. And when that happens, it probably won’t look like it was before the pandemic.
Expect more company-sponsored trips to meet your teammates. In the meantime, you may expect to attend fewer conferences or sales meetings. If you’re a former road warrior, you may find yourself traveling less than in the pre-pandemic days. But if you’ve never traveled on behalf of your company before, that could change—especially if you now have teammates scattered across the country.
The article how long it will take for business travel to return to normal originally appeared on NerdWallet.