These days, most travel is for pleasure, not business.
Even with inflation, tourism is booming this year — because nothing quite quells the anxiety of rising prices like a relaxing beach town trip, however many delays were involved in getting there. But corporate types are resisting a return to the hotel-hopping, frequent-flier-mile-collecting lifestyle much like how their underlings oppose going back to office cubicles. That’s creating a lot of displeasure for an industry highly reliant on high-margin business travel.
Business Class Clowns
Your Instagram feed full of pics from friends’ summer trips to Miami, Hawaii, and Austin is no outlier — US air travel topped pre-pandemic 2019 levels this Labor Day weekend, and airlines are predicting tourism to remain white-hot. But business travel is a whole other story, with the sector remaining around 30% lower than the pre-pandemic days, the Associated Press reported Tuesday.
Now, experts say corporate travel faces a long ascent before reaching the cruising altitudes of the pre-COVID glory days. Airlines are blaming big corporations more than small businesses:
- One obvious anchor dragging down business travel: remote work. Even if one company is fully back in office, sending its employees out to visit clients is entirely dependent on another company’s remote work policies — “On the corporate side, it just takes a little more to restart that because there are so many moving parts,” Chuck Thackston, data research lead at travel logistics firm the Airlines Reporting Corp., told the AP.
- Southwest Airlines says its biggest corporate clients — banking, consulting, and tech firms — have been slow to return to airports as costs soar, even as government, education, and small business workers resume travel. According to travel-management company CWT, business airfare has jumped 50% this year, while hotel rates are up 19%.
Flight Delay: The Global Business Travel Association now says corporate travel likely won’t hit pre-pandemic rates until mid-2026, an 18-month revision from previous estimates. That’s costing airlines and hotels billions of dollars: business travel generated $1.4 trillion in 2019, the agency says, and will only notch $933 billion this year. Perhaps it’s unsurprising, given that even a routine commute to the office now feels as arduous a cross-country journey.