Looking to the US – where business travel appears to be rebounding

20 April, 2022

The first round of data from the new Quarterly Business Travel Tracker from JD Power, US Travel Association and Tourism Economics has revealed that business travel is bouncing back strongly in the United States of America, and that is a positive sign for the rest of the world. The research found that more than four in five (84%) business travellers expect to take at least one trip to attend conferences, conventions or trade shows in the next six months.  

JD Power, US Travel Association and Tourism Economics are monitoring the return of business travel with the new tracker, which includes a quarterly survey of business travellers and the Business Travel Index (BTI) which provides a timely measure of business travel activity in the US during the most recent quarter, based on indicators such as hotel room demand, air passenger volumes, and arrivals of international business travellers.

The forward-looking components of the BTI also provide a glimpse of the current quarter, including hotel and air bookings, alongside the results of a quarterly survey of business travellers, while the business conditions leading index measures the context for business travel in the current quarter, based on forecasts of macroeconomic variables and other leading indicators. These provide some important forward observations of the industry’s recovery.

US Business travellers expect to resume travelling at a similar frequency as pre-pandemic

The travel survey of almost 2,600 business travellers (conducted by JD Power in early Mar-2022) reveals business travellers expect to resume travelling at a similar frequency as pre-pandemic, averaging about 1.6 trips per month (compared to 1.7 pre-pandemic).

The share of expected business trips accounted for by trips for external purposes, such as meeting primarily with people from outside their organisation, remained approximately stable with the pre-pandemic share at 50%, with the remainder accounted for by trips for internal purposes. Of external business travellers, 88% expect to take at least one trip in the next six months.

Around a third remain unsure or expect less travel to conferences, conventions or tradeshows

The results reveal that one-third of business travellers are unsure or expect to travel less to attend conferences, conventions or tradeshows in the next six months than before COVID-19. Nearly one-quarter (24%) of business travellers plan to take more trips to attend conferences, conventions or tradeshows than they did pre-pandemic and 28% expect to travel more to visit customers and suppliers, while just 17% and 13% expect to travel less for both purposes, respectively.

Many business travellers expect to make more – rather than fewer – trips to meet customers or suppliers

Many business travellers expect to make more – rather than fewer – trips to meet customers, suppliers and other external stakeholders than they did pre-pandemic (15% net positive), and more trips for the purpose of internal team or department meetings (10% net positive). The Business travellers surveyed report developing relationships as the most important aspect of their business trips, followed by closing sales and building awareness of their organisation’s products or services.

Working from anywhere remains normal practice for business travellers

The survey found one-third of business travellers still work fully remote and four in five work remotely at least some of the time. Many business travellers who work partially or fully remote report that their employer encourages them to travel to engage with other team members in person (38%), to attend training sessions in person (32%), or to attend in-person company or team celebrations (29%). Fewer than one-in-five partially or fully remote business travellers report they are not encouraged to travel.

A small minority remain unsure over future travel

About 6% of business travellers report they are not sure if they will take a business trip over the next six months. The most frequently cited reason was that meetings and conferences are not occurring (16%), or that their company is currently restricting business travel (13%). Just 12% of respondents who are unsure if they will take a business trip over the next six months referenced video conferencing as a reason.

US hotel business travel revenue projected to be down a quarter in 2022

Meanwhile, according to a new report released by the American Hotel & Lodging Association (AHLA) and Kalibri Labs, US hotel business travel revenue is projected to be -23% below pre-pandemic levels in 2022, ending the year down more than USD20 billion compared to 2019. This comes after hotels lost an estimated USD108 billion in business travel revenue during 2020 and 2021 combined.

While leisure travel is expected to return to pre-pandemic levels this year, business travel – which includes corporate, group, government, and other commercial categories – is the hotel industry’s largest source of revenue and is expected to take significantly longer to recover. Many urban markets, which rely heavily on business from events and group meetings, have also been disproportionately impacted by the pandemic.

It is ‘more important than ever’ to bring back business travel

The new report comes on the heels of a recent AHLA survey, which found two thirds (64%) of employed Americans and approaching four in five (77%) business travellers agreed that it is more important than ever to bring back business travel. The survey also found that 80% of employed Americans and 86% of business travellers say face-to-face interactions are important for maximizing company success.

In-person business travel and meetings have ‘undeniable advantages’ over virtual options

The shifting sentiments around business travel are supported by a recent analysis conducted by the San Diego State University School of Hospitality & Tourism Management on behalf of AHLA that found in-person business travel and meetings have undeniable advantages over virtual options, and that businesses and organisations that resume business travel and meetings more quickly are likely to have a competitive edge over those that do not.