McKinsey & Company report: how recovery is likely to happen

When the COVID-19 pandemic halted travel around the globe, business travelers had to pivot quickly from in-person meetings and events to virtual platforms. As the pandemic continues and travel-industry players look ahead for a rebound, our research shows that the post-crisis return will take years and that business travel will return at a slower pace than leisure travel.

Regional and domestic business travel will return first

Looking first at the distance of business travel, regional and domestic trips will likely see a return before international travel does. According to a Global Business Travel Association survey of its member organizations, companies are twice as likely to have halted international travel as having halted domestic travel as of July 2020.4 Within domestic travel, trips that can happen in personal or rental vehicles may replace short regional flights until companies’ comfort with sending employees via airplanes increases.

Travel managers with operations in Asia–Pacific say they have begun to see a slight uptick in domestic travel in countries where outbreaks have stabilized (for example, one organization we interviewed noted that domestic China travel was at 70 to 80 percent of pre-pandemic levels as of June) but that it’s nowhere near a full return to scale in any region.

International travel will take longer to rebound because of the complexity of government regulations, mandatory quarantines, and the high risk of fast-changing policies. In Asia, to help facilitate economic development, some governments (such as Malaysia and Singapore) are exploring the creation of business-travel corridors under strict protocols that allow exceptions to quarantine measures.

Business travel for in-person sales and client meetings will return first

Examining next the purpose for travel, other than for mission-critical use cases (such as supply-chain-related travel that has continued throughout the pandemic), travel for sales and client-related meetings is most likely to be among the first to return as domestic travel resumes and more travel is permitted, according to those we interviewed.

Sales-focused organizations expressed an urgency to return to face-to-face meetings, with the understanding that doing so will require both parties to be comfortable with the travel required. Whether client offices will reopen to workers and allow guests will be a major indicator of the likelihood of that type of travel returning. Other interviewees expressed a need to keep up with their competitors: once peers begin traveling for sales meetings or pitches, companies will face increased pressure to return to travel to win business among key customers.

The timeline for travel for internal in-person meetings to resume is longer, with higher levels of scrutiny on what is considered business-critical and can’t be accommodated with technology. Travel to interact with physical assets—data centers and IT infrastructure—will take priority. But economic constraints across industries, especially those hit hardest by the pandemic’s economic disruption, will decimate internal travel as budgets get disproportionately cut. Travel for internal MICE and other off-site gatherings may not return until well into 2021 or later. And some travel for internal purposes will be permanently replaced by virtual meetings and collaboration.

Business travel for major industry events will most likely be the last to return, as it requires a higher degree of confidence in public safety. Although conferences and trade shows are critical networking opportunities and difficult to conduct virtually, they are also high-risk, given the number of attendees, which can range from several hundred to more than 100,000. When surveyed about what measures will most boost confidence in business-travel bookings for major MICE, US travel planners ranked the availability of a COVID-19 vaccine highest, above stable-public-health indicators, and lifted government restrictions.

Rocketrip can help you reduce your travel spend while empowering your employees. The Rocketrip Covid features will support your Duty Of Care program, to allow for a return to travel safely. Now, while travel is still slow, is the best time to implement future cost-saving measures. 

Read full report: here