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Business Relations

Business Travel Steers Toward Slow, Yet Steady Ascent

April 23, 2022
Edna B. Shearer
Read Time : 12 Minutes

Companies rethink when and why employees should travel, with a commitment to workplace flexibility, sustainability and ROI

NEW YORK, April 18, 2022 /PRNewswire/ —

Key takeaways

  • Corporate travel did not meet most companies’ expectations in the second half of 2021 as the Delta and Omicron variants hindered plans. While one-third of travel managers surveyed in June 2021 expected to reach half of 2019 spend by the end of the year, only 8% reached that mark.

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  • Business travel spend is at least two years from reaching pre-pandemic levels: It is projected to reach 36% of 2019 levels in Q2 2022, and 55% by the end of the year.

  • The increase in companies offering flexible work arrangements will have an ongoing impact on business travel. One-quarter of companies say that working from home will lead to more travel to headquarters, but is likely to result in less travel overall­. Office-dominant companies are twice as likely to reach 2019 travel spending levels by the end of 2023.

  • For international travel, 1 in 4 respondents expect frequency of travel to Europe to near or exceed pre-pandemic levels this year. Asia and Latin America remain far behind in recovery expectations.

  • Three in 10 companies expect sustainability goals to result in an 11-25% reduction in travel budgets by 2025.

  • While in-person attendance is on the rise, conferences and events face another challenging year. These events offer valuable networking opportunities, but travel managers also rate content delivery more dependent on in-person participation than they did in 2021.

Why this matters

Even as COVID-19 health concerns and travel restrictions subside, corporate travel faces a complex prognosis. Many companies are now implementing the return to office plans they delayed last fall, and an increase in corporate travel is likely to accompany this shift. However, according to Deloitte’s new report, “Reshaping the Landscape: Corporate Travel in 2022 and Beyond,” a recovery to 2019 spending levels is not expected this year or next. While uncertainty around international relations and additional COVID-19 variants will continue to affect corporate travel, the scope of why and when employees are expected to travel for business is becoming clearer.

The study is based on a survey of 150 U.S.-based executives with travel budget oversight, fielded between Feb. 10 and Feb. 18, 2022.

Business travel set to take off in 2022, but pre-pandemic returns are delayed

Deloitte fielded its first corporate travel survey in June 2021, when a rebound appeared to be aligned with return to office plans initially set for the fall. However, as Delta was named a variant of concern a month later, many big companies pushed back their initiatives. Now, many of these same companies are reevaluating their overall approach to travel, driving travel managers to reduce their expectations while seeking opportunities to further increase the financial savings and environmentally friendly practices realized from two years of limited travel.

  • One-third (34%) of corporate travel managers surveyed in June 2021 expected to reach half of their 2019 travel spend by the end of 2021; however, only 8% achieved this milestone.

  • While 17% of travel managers anticipate a full recovery by the end of 2022, this is down significantly from the 54% who expected the same last summer.

  • Overall, strong growth is expected in 2022, but corporate travel spend is not expected to recover to pre-pandemic levels this year or next. Travel spend is expected to reach 36% of 2019 levels by the end of Q2 2022, increasing to 55% by the end of the year, and 68% by the end of 2023.

  • COVID-19 variants are a main consideration for this downward revision: Two-thirds of respondents (66%) say the Delta and Omicron variants caused them to push back travel timelines; 1 in 7 (15%) reported a significant rethink.

  • Travel restrictions and employee unwillingness to travel continue to be the largest deterrents for a full return; however, the influence of each is down 18% from 2021. Concerns about increased travel prices remain a persistent concern, yet increasing only slightly (1%) compared to summer 2021.

  • The return of live industry events is now among the top-five reasons for business travel. When considering the triggers for business travel, sustained low infection rates remain at the top of the list, followed by clients and employees returning to the office, and easing of quarantine requirements.

International travel poised for a slow return

Despite the easing of restrictions for some destinations, international travel for business still presents many challenges including testing requirements, quarantines and generally unpredictable regulations. Among those surveyed, international travel accounts for one-quarter of 2019 spend, and projections remain more conservative than for domestic travel. Geopolitical developments may further curtail plans for international travel, particularly to Europe.

  • Over half (54%) of respondents expect international travel to Europe to resume, but remain below pre-pandemic levels.

  • Sales visits (43%), leadership meetings (32%) and client project work (31%) are the top drivers of international corporate travel.

  • Europe leads destinations for U.S.-based travelers, with nearly 1 in 4 companies (24%) saying frequency will approach or exceed pre-pandemic levels by the end of 2022, followed by Asia (15%) and Latin America (12%).

  • More than half of companies with reasons to visit Africa (70%), the Middle East (54%) or Australia/Oceania (52%) expect no or very little travel to those regions this year.

Key quote

“Business travel seemed to be ready for takeoff last summer, but the emergence of COVID-19 variants quickly grounded plans — as a result, leaders are more conservative in their estimates for business travel’s recovery. While many of us are eager to see our co-workers, clients and associates in person, technology platforms have made it possible for most businesses to not just continue their operations from afar, but thrive in doing so. Combined with workplace flexibility that shows no signs of going away, businesses are reassessing and reprioritizing when and why employees travel — which can create a suitcase full of new opportunities for organizations to evolve and grow.”

— Mike Daher, vice chair, Deloitte LLP and U.S. transportation, hospitality and services non-attest leader

Workplace flexibility drives shifts in business travel

Many employers implemented flexible workplace policies over the last two years, and travel managers expect the future work from home rate to be 2.5 times higher than before the pandemic. This will continue to impact how and when employees travel for both work-from-home dominant companies (where the average employee comes to the office zero to two days per week in Q2 of 2022) and office-dominant companies (where the average employee comes to the office at least three days per week in Q2 of 2022).

  • For companies that are work-from-home dominant in Q2 of 2022, 36% expect their corporate travel spend to recover to pre-pandemic levels by the end of 2023.

  • Conversely, 71% of office-dominant companies say their travel spend will recover by the end of 2023.

  • As a result of flexible work arrangements, 1 in 4 respondents expect more trips to company headquarters, despite less frequent travel overall.

  • For employees who relocated during the pandemic, two-thirds of companies will reimburse for trips to headquarters. However, nearly one-third (29%) of companies leave employees to shoulder the cost themselves.

  • Additionally, private rentals, which offered travelers more space to distance from others during the pandemic, have not become a mainstay of corporate travel programs. Only 1 in 10 companies include non-traditional lodging in their corporate booking tools, and about half (49%) of companies do not reimburse employees for non-hotel lodging.

Sustainability and cost guide decisions on when to travel

The severe decline in corporate travel throughout the pandemic helped companies realize significant gains toward their sustainability goals — and their bottom line. As a result, when determining which trips employees should take, business leaders are weighing the expense and carbon emissions involved, along with the ability of technology to replace the need to meet in person.

  • One-third of travel managers (35%) surveyed say their companies have pledged to reduce carbon emissions by a specific amount within a certain time period, affecting when and how employees travel.

  • Most respondents expect sustainability to reduce their 2025 travel spend by 10% or less. However, nearly 3 in 10 expect a reduction of 11-25%.

  • The rise in travel prices grew slightly as a concern from 2021 to 2022. Nearly 3 in 4 companies say they will seek to control costs by limiting the number of trips taken this year.

  • Nearly 1 in 3 travel suppliers are looking for guidance from travel management companies on how to reduce their carbon footprint. Further, one-quarter of travel managers say they will prioritize travel suppliers that invest in sustainability.

Key quote

“As the pandemic situation continues to improve, business leaders have new factors to consider when determining which trips justify the time, expense and carbon emissions involved. Bottom-line and environmental priorities will be supported by technology and behavior changes brought on by two years of mostly virtual meetings and events. Tech platforms will continue to void the need for some trips long after the public health crisis abates.”

— Eileen Crowley, vice chair, Deloitte & Touche LLP and U.S. transportation, hospitality and services attest leader

Connect with us on Twitter at @DeloitteCB or on LinkedIn: @MikeDaher and @EileenCrowley.

About Deloitte

Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 345,000 people worldwide connect for impact at www.deloitte.com.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

As used in this document, "Deloitte" means Deloitte LLP. Please see  www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. (PRNewsFoto/Deloitte)

As used in this document, “Deloitte” means Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. (PRNewsFoto/Deloitte)

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SOURCE Deloitte

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