Business travel is coming back, but it looks different
If you’re looking for proof that, at least psychologically, we are mostly over the pandemic, look toward the skies.
On Wednesday, United Airlines reported more than $12 billion in revenue for the prior quarter, the most money the company has made in over a decade. Thursday, American Airlines told investors it made its first quarterly profit since the pandemic hit.
Those companies’ planes are mostly packed with pent-up demanders for vacation travel. But a more lucrative passenger is also returning to the skies: the business traveler.
Justin Strelow is generally thrilled to be traveling for business again. Although he’s not thrilled with every part of it.
“I do not eat at the airport. I am trying to drop a few pounds,” Strelow said. “I’m trying to drop my pandemic weight.”
Strelow is a co-founder of Insysiv, a Kansas City, Missouri-based company that makes software for hospital labs. In two weeks’ time, Strelow will be flying himself and three employees to Anaheim, California, for a trade show. Even without airport Cinnabons, the trip will cost his small business around $15,000.
“I am still kind of old school. I like face-to-face with folks,” Strelow said. “We’ve found the value of getting in front of people in person and really solidifying those relationships.”
That is music to the airline industry’s ears. Before the pandemic, business travel accounted for more than 50% of profits, said Ryan Mann with the consulting firm McKinsey.
“Business travelers tend to book at the last minute, and that’s when prices are the highest,” Mann said.
Business travel is about 70% of where it was in 2019, according to the aviation data company Arc.
Mann said Zoom has replaced smaller in-person meetings that used to involve travel, “but conferences, frankly, are filling the gap.”
As are corporate retreats and team-building trips where remote employees can finally see how tall their co-workers are.
While business travel is trending up, it’s an open question whether it will ever recover fully. A recession could make that more difficult.
“That’s an area where they can cost cut, and there’s a clearly proven alternative in Zoom,” said Chris Raite, an analyst at the investment research firm Third Bridge.
Plus, you don’t have to worry about your Zoom getting delayed because of a pilot shortage.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
