- Daintree Advisory
The Future of Travel
Interviews By Alison Gross for Worth Media
Business travel is an important part of the economy. A study from Oxford Economics found that $12.50 of additional revenue is generated in the economy for every $1 spent on business travel. Critical to the hotel industry and to the meetings and conventions industry, it is also an economic necessity to airlines who rely on business travelers because they frequently buy tickets at the last moment, often paying top dollar. According to travel software firm Trondent Development Corp., business travelers account for 12% of the passenger base but 75% of airline profits.
When business travel returns, it is likely that it will change. For the past fifteen months the pandemic has dramatically sped up acceptance of virtual communication tools. Businesses are likely to plan for reduced discretionary spending, which may result in travel budgets being squeezed for some time. Business leaders may combine meetings so that they maximize the value of each trip for their organization.
In an Op-Ed in Business Travel News, the founder of tClara, Scott Gillespie writes about the anticipated reduction in discretionary business travel, saying there will be, “fewer but more important trips and travelers. Low-value trips will get denied by finance approvers and far fewer infrequent travelers have the need to travel. Those who do travel are deemed "important," just like their trips. The inevitable conclusion is that most corporate travel budgets will be permanently smaller. Business travel peaked in 2019”
Pre-pandemic, I travelled internationally every month. I’m one of those business travelers who kept flight numbers and schedules in my head and whose car service phone numbers in each country were stored in my phone favorites. Over the past few weeks, I talked to a group of similar ‘road-warriors.’ These executives are among leaders who travelled almost every week, and in the course of their pre-pandemic lives, spent between a third and a half of their time away from home.
How do they feel about business travel now?
How have they adapted their work in the past year?
And has it changed their thinking regarding how much they traveled in the past?
James Kent, who is the CEO of a global reinsurance company and is based in London, told me that his firm has effectively adopted a work from home process since March 2020. He says, “Most of our offices around the world were remaining closed during this period. Naturally this has been a dramatic change from the past where I was either working from an office or travelling to meet clients, prospects and colleagues, with perhaps a 50/50 split between the office and travel. While it is easy to reflect that travel was too extensive in the past knowing now that my industry has managed with almost no business travel for the last year, I don’t think anyone should judge the two extremes of travel pre- and post-pandemic as a single right answer. A new middle ground will emerge.”
Hedieh Fakhriyazdi, who heads social responsibility and runs the foundation for a law firm and is based in New York says, “My work, including programs I run and manage that require travel, has drastically changed in the past year, but I would say that it has largely been for the better. Business travel has become less of a necessity through platforms such as Zoom, and even conference platforms that allow for dynamic networking opportunities through virtual forums have worked for me. In some instances, networking virtually can be less anxiety producing for introverts. It definitely takes the edge off when you are meeting someone for the first time on Zoom, but from the comfort of your own home.”
Kent Watkins, who runs his own advisory firm based in Washington DC, told me that he has worked from his home for many years, after giving up the office routine for a more flexible work-style. He says, “The pandemic has not changed my thinking on the frequency of my travel. Sometimes it’s been 50 weeks out of 52 but averaged about every other week. Not traveling for the past year did negatively impact business, but I was ready for a ‘Gap Year’ and since it also affected everyone else, I did not lose out that much. In fact, it was great to have time to catch up on a lot of backlog. I have always relied on the internet and videoing. I personally missed seeing people at receptions but didn’t miss the logistics of travel, particularly the local travel within the Washington, D.C. area; the challenges of every day driving and parking.”
Jose Pariente, who heads procurement for a global law firm and is based in New York told me, “We essentially stopped travel. This travel freeze during the pandemic has changed my thinking regarding how much my colleagues and I traveled. It became clear that much of business travel in the past was discretionary.”
Pamela Thomson-Hall, who heads the region of Central and Eastern Europe, Middle East & Africa (CEEMEA) for a global public company and is based in London shared that she has spent the past year working in a six foot by six foot space, maximizing her use of virtual meeting software: “The technology of seeing people on screen and in their own homes has given me the opportunity to meet with more people and get to know them better. It has been quite levelling, with more access to senior leaders and to meet more junior people than I would have typically met on a business trip. This year has changed some of my thinking of how much my team travelled. In the future I will be much more circumspect about approving a business case for my team to travel. We cannot justify every travel request given that we now know we can do so much more remotely using new technology.”
She continues, “But for myself, I already kept my travel to an absolute minimum before the pandemic, and so that won’t change. I used to fly in and out to reduce cost and time away from home, and pre-plan to maximize my time on the ground, doing breakfast meetings, back-to-back meetings and group meals. It was exhausting. Now I would try to be kinder on myself, not fly through the night sleeping on planes and focus more on quality. I would consider doing an extra day, at my own expense. I now realize how life is so short and we need to maximize our experiences and that in the past I never saw the towns I visited for meetings. So I would try to be more mindful of where I am and take advantage of the experience more. I can’t say that would necessarily mean I’d stay longer for work, but it will mean I will think more about how to add this to holiday leave, which I have never done before.”
We then talked about business strategy and how travel has always been thought to be perpetually linked to business development for regional, national and global companies. I asked:
Will your strategy for your business travel change in the future? And will this impact how you work, assign tasks to colleagues/team members, or delegate responsibilities?
James Kent: “Looking ahead, one of the biggest changes I see is the acceptance that it is okay to arrange meetings by video conference. Previously this may have been seen as entitled or lazy; this viewpoint should be a thing of the past. Having said this, I don’t believe the video meetings have the same impact as in-person meetings. We need to continue in-person meetings in order to nurture and develop business relationships. The area of business travel that should reduce is inter-company travel where video meetings will become a more normal way of communication.”
Hedieh Fakhriyazdi: “I have no doubt that the pandemic will cause me to pause before booking my next flight for business travel – pausing to ask myself the questions: is this trip truly necessary? And do the benefits of networking, professional development, business development, etc., outweigh the potential negative consequences related to public health concerns?”
Kent Watkins: “My strategy for business travel will not change in future. I resumed travel mid-April 2021 (traveling to N.C., S.C., Ga. and headed to NYC a week later). Once I can go back to China, Paris, Berlin, London, Israel, etc., I will. I don’t think there will be a great change to the way I work, although some meetings will change to a virtual format, which will be great.”
Jose Pariente: “I will definitely travel less post-pandemic. In the past I traveled for one third of the year. I would get on a plane on a Monday and spend 10 days in Asia or in Europe. Personally, I will miss it and I am disappointed that my work will not include as much travel in future. During the pandemic the pendulum swung so far to ensure safety, that it I think that it must swing back. I believe that there is a happy medium where we come out of this planning for more carefully thought-out travel. Business travel will not be the way it was pre pandemic, however conferences and internal meetings will evolve to become a new normal. They will come back as the pendulum swing happens. I think it’s going to take time, but we have short memories and sometimes we experience collective amnesia, so people will eventually plan their business travel without remembering or considering pandemic risk.”
Pamela Thomson-Hall: “For me there will be no change in my business strategy. I only travelled when I needed to, so I had already made that quality assessment. For my team, my strategy may change because different skills are needed in order to successfully manage remotely. The lack of travel created both positives and negatives to my business. In the early stages of building a client relationship it is better to be face to face, so that was lacking and probably negatively impacted business, especially if your competition is on the ground. But for operational reasons there was surprisingly minimal impact. Location of team will matter less, however there are corporate tax implications based on where people work from, so this will be a consideration for company’s when employees request to move their location to a different country.”
Each of us shared that we have spent more time with close family members during the pandemic and that we want to include travel plan with family in our future. I asked:
Are you considering combining your business travel with leisure travel and/or family trips? How do you think this will impact your trips? Do you feel differently about travel to meetings in cities vs. resort destinations?
James Kent, “We own a vacation home in the US, so the simple answer is yes but typically most business travel is exactly that, for business meetings only. One point that may influence people wanting to combine the two is to reduce their own carbon footprint by minimizing the number of flights taken each year. I list travel as a pastime and love exploring new destinations so fair to say I would be interested in combining the two as long as there is adequate time for both.”
Hedieh Fakhriyazdi, “I prefer to compartmentalize my trips and treat business trips and vacations separately. Sometimes when traveling for work I may add on one day for personal time to explore an interesting city, but I do not often add in a vacation – I would rather have a significant separation between the two.”
Kent Watkins, “I always combine business with pleasure, but I have worked for myself for 30 years. This being the case, there will no great difference in how I put together trips. As far as locations go, nothing in the world is off the agenda. I will react to some international meetings (as well as domestic ones) as they come up naturally or I will create my own schedule and seek out the meetings or appointments that will fit. Resorts are not of great interest to me unless they are also where the meetings are being held, and then I would want to combine it with urban-oriented research and culture.”
Jose Pariente, “I rarely combined business and leisure in the past. Spending so many days away from home, I always preferred to get back home, also we had younger kids. Now we are empty nesters, we might try to do more combination trips in the future.”
Pamela Thomson-Hall, My initial reaction to the question, ‘where would you be interested to travel’ is ‘Anywhere!’ However, I try to avoid conferences as I prefer the more focused bespoke meeting scenarios where quality of interaction is higher. I will consider combining business with pleasure, but as a leader it’s important to set an example and role model what’s right so I’d be clear this is on my own time and at my cost. If this is offered to team members, then there needs to be clear rules that extra days, accommodations and other costs are paid by the team member, and not picked up by the company. I would consider adding vacation time to the end of a business travel trip – to reduce my own personal exposure to the risks of traveling, and travel time, but the chances of aligning my husband’s diary and the children’s holidays with mine are remote!”
The US has re-joined the Paris Climate Agreement and the current U.S. administration has announced plans to cut greenhouse gas pollution as part of the economic recovery to create jobs and build resilient infrastructure. Now that corporate leaders are facing a de facto mandate to embrace climate change and include that in operating assumptions going forward, I asked: Does limiting your carbon footprint influence your travel planning? Will you consider travel by train or road as well as flying? And will you look for destinations and accommodation that practice sustainable programs in their operations?
James Kent responded, “I think companies will use their ESG guidelines and will seek to enforce such thinking among colleagues. I prefer train travel to flying. Depending on distance of travel, for example, when I am in the U.S. I will often take the train from NYC north to Boston or south to Washington DC. Similarly, in Europe the train is often a more efficient and comfortable way to move between cities and countries. I think destinations and hotels that practice sustainable programs in their operations will be more commonplace for business usage as ESG corporate governance increases.”
Hedieh Fakhriyazdi replied, “I consider my carbon footprint when I travel and will continue to practice this when it is feasible for my travel.”
Because he has worked directly on climate change initiatives, Watkins goes on to say: “This is a tough question because I should consider it, given that I am a climate consultant. I have also compiled most of the world’s urban climate plans, city by city, and am a long-time expert in transit-oriented development. However, it is much more difficult to make personal choices for transportation. I was an early pioneer in buying Carbon Credits but I am better at advocating it from a policy platform, having worked with the World Urban Forum, World Economic Forum, Habitat, my own Academy, and various governments, than being personally involved in day-to-day decisions. When traveling, I ask hotels for no change of bedding, etc, and I re-use the small water bottles by buying larger ones to pour into them. Overall, I think I can better support politicians and companies that presumably have the greater power to change behavior through technology, infrastructure, and regulations.”
Jose Pariente says, “My own carbon footprint doesn’t come into my thinking for my travel. I work hard to ensure that my company makes a difference regarding climate change. We have LEED certified buildings, and I try to be thoughtful towards the environment in other ways, but it has not influenced my travel decisions. Time and convenience has always been the driver of travel booking. Using the Acela for North East corridor made sense, but longer trips were always by air. Ultimately, it’s the client’s needs that drives the business travel.”
Pamela Thomson-Hall agreed that it is clients who drive much of the travel decisions. She says, “Yes of course I have reflected on limiting my carbon footprint. However, business travel is influenced by client requirements, so the client needs would come first. I like to use the train when possible. As a woman traveling alone, I dislike corporate hotels that are ‘cookie-cutter’ and have the same décor in each location, so you never know where you are. Rather than being in a large hotel that doesn’t reflect the cultural look and feel of the city, I prefer a smaller boutique hotel and many of these tend to have strong sustainability practices. I feel safer and more comfortable in a smaller hotel where guests are stopped in the lobby and the hotel bar is for residents and their direct guests only and not a gathering place for locals to find people who travel.
Based on the opinions expressed in these interviews, business travel is pointed to a more strategic approach in the post-pandemic period, placing more of an emphasis on the decision making that must occur for each trip. Client relationship building and business development travel will take precedence in future corporate travel budgets, with internal meetings taking a back seat, perhaps shifting permanently to the virtual mode. We may see more robustly governed corporate travel policies. More accountability, and therefore more analytics tools for measuring travel ROI, which are never an easy tracking task.
The ‘Road Warriors’ will be back, but they will be rarer, forming a more select group, who will be conscious of their status and understand that they are required to prove their value to their stakeholders. As Adi Gaskell wrote in Forbes in December 2020, “There is hope across society that what returns after the pandemic is a better version of what came before. Whether it’s cleaner planes, easier transfers, greater connectivity, or environmental friendliness, there is just the same hope for the future of business travel.”
We agree! Given the perspectives expressed by the veteran corporate travelers we consulted for this article, we look forward to a renewed, and more thoughtful approach to how business travel will evolve.