The travel industry is still feeling the loss of business customers
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The Transportation Security Administration is getting ready for 20 million passengers to come through airport checkpoints over the four-day weekend — roughly double the number last year. On the day before Thanksgiving, more than 2.3 million travelers came through security — just a few hundred thousand fewer than the day before Thanksgiving in 2019.
The return to the skies is driven by domestic leisure travel, while business and international trips lag behind. International travel is still down by about 40%. Business travel, on the other hand, is down by half, according to Colin Scarola, vice president of equity research at CFRA Research.
“The things holding back international and business — a lot of offices are still closed, a lot of businesses are enjoying the savings of a reduced travel budget,” Scarola said.
The pandemic has altered the way business is done, said Airline Weekly’s Madhu Unnikrishnan.
“The investment banker who bought a last-minute business fare for a lunch meeting in London — that’s probably gone forever. And meetings that can be done over video-conferencing probably will not go back to in-person meetings any time soon,” Unnikrishnan said, though he added that small and mid-sized businesses are starting to send people out again to meet customers.
While airlines are still hurting without corporate clients buying the most expensive seats on the plane, non-business travelers are picking up some of the slack.
“There is a trend toward ‘premium leisure,’ as it’s called — people who’ve been stuck at home during the pandemic have a lot of savings and more discretionary income and are upgrading themselves to business-class seats and premium seats for vacations and to visit friends and family,” Unnikrishnan said.
One important segment of corporate travel that hasn’t recovered yet is conventions and trade shows. These events can take a year or more to plan, said Chip Rogers, president of the American Hotel and Lodging Association.
“We believe that by 2023, early 2024, we’ll be back to 100% so we see the planning at these large convention centers picking up,” Rogers said.
That pick-up matters most to big urban hotels with lots of meeting and banquet space — and lots of workers in their bars and restaurants.
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