Corporate travel faces a lengthy downturn from the Covid crisis due not just to travel restrictions but to working from home, industry investment analysts have warned.
UBS analyst Jarrod Castle told the UK’s Institute of Travel Management (ITM): “The crisis will take several years to get through. A rise in GDP next year may not mean travel is out of the words.
“After the financial crisis [in 2008] it took five years for airports to recover lost traffic.”
Speaking at an ITM virtual conference, Castle said: “Between the G20 countries, 96% of routes have travel restrictions. Three weeks ago the figure was 95%.”
The G20 group comprises the EU and 19 countries with the largest economies.
Castle noted: “Europe started to open up in the summer with around 40% of intra-Europe traffic. Now it is 36%.
“It is one step forward and two steps back. This is very different to the financial crisis.”
He said “The bottleneck is around governments.”
But he added: “We also have this working from home trend. Survey results show this continuing to grow. At least 55% in a recent UBS survey said they want to work at least one day from home post-Covid and 40% said three days.
“For travel, are you going to be able to access the people you want to see if they continue to work from home?”
Castle argued: “The other structural trend is the environment. It was here before the crisis but is speeding up.
“One third of people say they will reduce their air travel [because of its environmental impact]. There is some indication people will reduce their travel consumption.”
He told the ITM: “Surveys suggest business travel could reduce by 20% next year against 2019. I would take that number. The economic background will be challenging.”
Investment bank Credit Suisse echoed Castle’s assessment in an analysis of the corporate travel sector produced at the end of September.
It predicted “a highly fragmented recovery of corporate travel activity” partly due to increased working from home.
Credit Suisse noted that in September “only 40% in Britain were back to their desks” and “not all returners [were] working from the office full time”.
It concluded: “We expect 50% of employees back in the office in 2021, meaning a recovery in corporate travel only in 2022.”