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Business Travel

Corporate Travel's Downturn Will Deliver This Financial Blow Across All of Travel

Matthew Parsons and Seth Borko

Photo Credit: Many international organizations are keeping their travel freezes in place for the rest of the year. Unsplash / Pawel Chu

Skift Take

Billions of dollars in revenue are at stake next year, even once a dire 2020 is out of the way.

Business travel is good business. The corporate guest, or rather his or her company card, is a welcome one at any hotel, while passengers at the front end of the plane are far more profitable than economy class flyers. The bad news is they’re not the first to return. While leisure travelers decided they needed a vacation this summer, corporate travelers still aren’t checking in. Should the travel industry start worrying about losing this business in the longer term, and if so — what happens next? Indecent Exposure As we dig into the second half of the year, businesses remain cautious, and many larger organizations probably won’t travel for the rest of this year, some potentially well into 2021. Their absence could hit hard — even with a reduction in corporate travel of one-third next year, one major hotel brand's could find itself with a gap of more than $12 billion in terms of room revenue generated by its franchise and management partners. "Everybody thought this will pass, we'll get through the summer," said Gary Pearce, chief commercial officer and regional managing director for the Americas at ATPI. "Companies are saying they're not sure they want their people to travel because they're not ready to travel, so that takes it to the end of the year. A lot of companies are saying 2020's kind of gone."

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Pearce said companies had also found out a way to do business virtually, even though it's not really how they want to do business. As time goes on, this could become embedded into company culture. Salesforce, for example, announced last week that employees could work from home until August 2021. Areka Consulting is predicting next year's corporate travel volumes will drop down to 25 percent to 50 percent of the levels seen in 2019. Up In The Air For a snapshot of the impact on air passengers to date, since the middle of February there have been some 1.6 billion fewer seats operated than in 2019, according to aviation data firm OAG. For the whole of 2019, the International Air Transportation Association expects the number of global passengers to fall 55 percent in 2020, and f

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