International business travel will remain 65% down on 2019 next year, according to investment bank Credit Suisse.
It warns the corporate travel market may only recover to 80%-90% of its 2019 level by 2024.
In a report on the sector at the end of September, Credit Suisse suggests availability of a vaccine “at critical scale on a global basis” will stimulate a recovery and “should see recovery gain more momentum” in 2022.
But it argues: “It is unlikely corporate travel budgets will be fully reinstated. [We] see a 60%-70% recovery on 2019 as reasonable [for 2022].”
Beyond 2022, Credit Suisse says: “We expect corporate travel to resume growth in line with GDP once the global economy normalises and corporate travel policy and budget adjustments are implemented.”
However, it suggests demand will remain lower even after a rollout of a vaccine, arguing: “We expect corporate travel from largely-vaccinated regions to poorly-vaccinated regions to remain limited.”
Credit Suisse also predicts “a highly fragmented recovery of corporate travel” partly due to increased working from home.
The bank’s report notes that in September “only 40% in Britain were back to their desks” and “not all returners [were] working from the office full time. We expect 50% of employees back in the office in 2021, meaning a recovery in corporate travel only in 2022.
“We see the return to work as critical for the outlook for business travel as the rationale for discretionary business travel is dependent on parties being in the office for a physical meeting to take place.”
Credit Suisse suggests upscale hotels will be most affected by the downturn as corporate travellers provide 60% of luxury hotel demand.
It forecasts budget carriers Ryanair and Wizz Air will benefit at the expense of network carriers such as Lufthansa as business travel contributes more than 50% of such airlines’ revenue.