Business Trips Are Coming Back Faster Than Expected in the U.S.
In-person conferences are back sooner than anticipated in the U.S., a sliver of good news for industries like airlines and hotels that are relying on corporate travel for a full recovery.
About half of attendees at a large annual meeting of accountants are expected to make the trip to Las Vegas this month, substantially more than the organizers anticipated at the start of the year. And some conferences planned in the fall have a full pre-pandemic flavor, with almost all of the speakers and attendees planning to be on site rather than over Zoom.
“We are offering digital-only tickets, but are expecting about 95% of our attendees to be in-person,” Jon Weiner, founder and chief executive officer of health-care conference HLTH, said via email. “Attendee sales are trending as they were for our last in-person event (2019) and sponsorships are selling out quick.” This year’s gathering takes place in Boston in October.
The recent pickup was captured in surveys of decision makers. In its second-quarter economic outlook survey, the Association of International Certified Professional Accountants found that about a third of business leaders estimated that corporate travel already has or would return to pre-pandemic levels by the end of the year.
“There’s been an underestimation of the bounce back” in the service industry, said Ash Noah, vice president at the AICPA.
But corporate travel still has long way to go: It’s running at 30% to 35% of pre-pandemic levels, according to JPMorgan Chase & Co. And it will take even longer for international business trips to pick up, with many travel restrictions in place to countries where vaccination rates are lagging and the delta variant of the Covid-19 virus is spreading rapidly.
The urge to go back to in-person gatherings is tied to the fast-pace economic recovery in the U.S. after vaccinations ramped up and activity restrictions eased -- not to mention Zoom fatigue. Some airlines executives have said they expect a strong rebound in U.S. corporate travel after Labor Day, when many workers will be returning to offices.
Here’s a look at the uneven corporate travel recovery:
Global corporate travel bookings are recovering at a 10% rate week over week, according to TripActions Inc., a corporate travel manager that collects fares from ticket-distribution systems. They were up more than 300% from the start of the year, as of last month. The pace accelerated in June, as vaccination rates increased and offices reopened, TripActions data show.
The increases are so large in part because travel was so restricted in the summer of 2020. Bookings are still far from back to 2019 levels, but they do point to sharp uptick in demand.
Corporate Trips ‘Renaissance’
United Airlines Holdings Inc. last month announced a record jetliner order and an ambitious upgrade for its aircraft cabins, expanding its hubs in two key destinations for business travelers: San Francisco and Newark, New Jersey. And Delta Air Line Inc. Chief Executive Officer Ed Bastian said he is confident the U.S. will soon experience a “renaissance of business travel,” with figures eventually reaching pre-pandemic levels.
“No one is going to be waiting for the government to say now is the right time to travel,” Bastian said in June. “Businesses are going to be making those decisions and pushing their people out on the road.”
Still, spending on business travel remains limited and concentrated on a few top U.S. destinations. The bulk of the travel boom so far this year has been for leisure trips, spurred by pent-up demand from consumers, especially higher-earners, eager to get away from home.
Compared with 2019, 21 of the top 25 hotel markets had revenue declines of more than 20% in May, according to data from the American Hotel and Lodging Association. Urban markets that rely heavily on business from conferences and meetings, continue to face a “severe financial crisis,” the industry group said.
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