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Analysts forecast business travel to ‘pretty much fully recover’

Industry analysts have dismissed suggestions that corporate travel will fail to return to former levels post-pandemic.

But Credit Suisse managing director and transport and aerospace analyst Neil Glynn warned there would be no immediate return and likely “a significant haircut” to internal company travel.

Speaking at a CAPA Centre for Aviation virtual summit, Glynn said: “People need to accept it will take some time until we get full clarity [on a restart]. There is a need for people to return to offices first.

“For a lot of the corporate travel market it won’t be clear for some time what 2022 will look like.”

He argued: “I struggle to think that corporate travel budgets at a lot of businesses will go from almost zero to 100% in one fell swoop. So 2022 will probably be transitional.

“A lot of industry commentators have converged around a 15% reduction in corporate travel demand. The view we’ve taken suggests a very significant haircut to internal [company] travel where there are alternatives.

“But external travel probably represents two thirds-plus [of the market] and most of that will recover given the way most business is done, the way revenue is generated and the competitive nature of most sectors.

“Ultimately, external travel will pretty much fully recover.”

Glynn suggested: “It will differ sector by sector. But until we get more clarity it has to remain speculative.

“A focus on whether we see recovery by 2023 or 2024 misses the point that once we get to that point economies will continue to grow.”

Richard Clarke, managing director and hospitality analyst at AB Bernstein, pointed out: “There were doomsday predictions of the death of business travel in 2009 and they turned out to be wrong.

“Probably there were predictions of the end of business travel if you go back to the invention of the telephone and of the internet and of videoconferencing. “

Clarke told the CAPA summit: “We may see some change – a blurring of the lines between travel for business and for pleasure, between living and travelling. But that could be good for business travel. People being more flexible could be good for the accommodation sector.

“Things could be different but overall they will recover pretty much back to where they were.”

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