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Hospitality-Tourism
Business Observer Thursday, Aug. 12, 2021 3 months ago

While leisure travel spikes, business travel remains half of what it was

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Tourism numbers are back up. New flights are multiplying in airports across the region. But business travel has been slow to join the party.
by: Amanda Postma Sarasota-Manatee Editor

The pandemic placed a strain on travel in general. 

But after more than a year, leisure and personal travel levels are spiking off the charts. Planes are full. Resorts and restaurants are packed again, So what’s going on with business travelers? 

“It is coming back,” says Cihan Cobanoglu, ​​the McKibbon Endowed Chair at the University of South Florida Sarasota-Manatee campus. “It’s still not to pre-pandemic levels.”

In some metrics, business travel is significantly off from pre-pandemic levels. The The U.S. Travel Association, for example, estimates that the industry might not fully recover until 2024. And the data so far is stark: business travelers, who tend to spend more per trip than leisure travelers, accounted for some $300 billion in spending in 2019, a USTA report shows. That shrunk to $95 million in 2020. 

A key question in the rise and fall of business travel is how much staying power will Zoom and other virtual meetings have? The answer to that will drive many business travel decisions in the near future, say both travelers and experts. 
 

Moving forward 
Cobanoglu also is the director of the M3 Center and coordinator of International Programs for the School of Hospitality and Tourism Management at USF. He has been working with the M3 Center for Hospitality Technology and Innovation to track American traveler confidence level since July 2020.

The center collected the data on a monthly basis, calling it the American Travel Confidence Index. Each month, the center reached out to 1,500 Americans with the survey. Some responses were weeded out based on qualification and validity. The data was collected on a zero to 100 scale. 

The index shows confidence levels for staying at a hotel were 64.3%, while traveling by air was 59.2%. These percentages are representative of July 2020-July 2021. 

Yet business travel remains 50-60% of what it was before the pandemic, Cobanoglu says. Based on the index, he believes 20-30% of business travel will never come back. “People have learned how to do business online,” he says. 

Courtesy. Dr. Cihan Cobanoglu, ​​the McKibbon Endowed Chair at the University of South Florida Sarasota-Manatee campus says business travel is coming back.

The percent of business travel he doesn’t think will come back will instead turn into attending events, meetings and conferences virtually. And some kinds of business travel, he says, will continue to grow — but in different forms. 

Hybrid events
With hybrid events and work schedules becoming more popular, Cobanoglu says “Giving people options will be key.” That goes for employers offering hybrid schedules and hosts offering a virtual option at in-person events. Otherwise, people will just go elsewhere. “Facilities should be prepared for hybrid events,” he says.

“Florida is doing much better than other states,” he says in terms of business travel returning. He notes that with the state being one of the least restrictive in terms of mandates, a lot of conferences are returning to the Orlando and Tampa areas. “Florida is open for business.” 

Scott Robertson of Scott Robertson Auctioneers, in Matlacha, Lee County, recently traveled to an event in Minneapolis. His presentation, with his colleague Sara Rose Bytnar, discussed the ways nonprofits can host fundraising events through hybrid approaches.

Robertson thinks hybrid events are the “best of both worlds.” He says it’s a great way to increase attendance at events because people will still travel to be in person, and others will watch from the comfort of their home. “There’s going to be no geographical boundaries,” he says. 

Courtesy. Scott Robertson of Scott Robertson Auctioneers believes hybrid events might be the future of business travel.

During Robertson’s recent travels, he has seen a lot of people on the road and in the air. But he says it appears to be mostly for leisure or personal reasons. “People don’t seem to be traveling as much for meetings.” He doesn’t expect this will change much with Zoom around. 

“There’s a lot of virtual events so we don’t have to travel for work,” he says, adding, “now, this may change as more and more people go to in-person events.” 

“I think people have quickly gotten up to speed on Zoom and we’re learning we can have those meetings and conferences on Zoom and get the same thing accomplished,” he says. “Perhaps we don’t have to travel for most meetings.” 

Booked planes
Every airplane Robertson has been on of late has been full, noting the flight attendants have announced the flight is booked. But it seemed to him that most of the passengers were going on vacation. He’s not the only one to notice this.

'The rat race has begun. “It’s crazy. Aside from (people wearing) masks, it appears as if COVID-19 never happened' Scott Watson, M3

Scott Watson, chief sales and marketing officer and partner at M3, a hospitality software firm, continued traveling throughout the pandemic. But that travel was reduced to company meetings and events, given the majority of his purpose, to meet with clients, was squashed because offices were closed. (M3 provides software to the M3 Center at USF.)

Early on the flights were much less full and the hotels were grateful to any guest who walked through the door. “The heart of hospitality really shone through during that time,” he says. 

His company sells products directly to the hospitality industry and Watson says they saw a lot of businesses go under or merge with other businesses over the past year. 

Fast forward to today and things are a little different. In the past couple of months, Watson has noticed the planes are “filled to the brim” with passengers. 

“The rat race has begun anew,” he says. “It’s crazy. Aside from (people wearing) masks, it appears as if COVID-19 never happened.” 
Business hotels
Watson has seen firsthand how the dwindling business travel is affecting, well, business. 

One of the hotels he works with relies heavily on business travel. “Business travelers make up the majority of their guests,” he says. With business travel being far and few in-between, the hotel has had to shift their business a bit. 

Courtesy. Scott Watson, M3 chief sales and marketing officer and partner, finds more business travelers at hotels than on airplanes.

Now, business travelers are accepted Monday through Thursday and leisure travelers are welcomed through the weekend. “It takes all the help they have,” he says, because finding labor for hotels has been difficult. In order to not sacrifice a guest's quality of stay, hotels have had to lower their occupancy and even limit what types of travel are accepted on certain days. 

With that said, Watson is starting to see more business travelers at hotels than on planes. “It does appear to be the normal mix of business travelers in the hotels where I stay,” he says, noting he’s seen a fair share of business dress, including the occasional tie. In the same breath, he says most air travel is leisure. “The hotel industry is being driven by business travelers,” he says. 

The future may not be so bleak for business travelers and everything impacted by the lack thereof, but Watson says it’s too early to really tell.  “The metrics have changed for everything,” he says. “I think we were all hopeful to be returning to 2018.” 

Of course, with the Delta variant running amuck and threatening new mandates, there’ future is murky. Either way, there’s something Watson says we can all agree on. “People are hungry for face-to-face contact,” he says. “It’s time to get back to work.”

 

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