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Companies that rely on business travel—including airlines and hotels—have suffered in recent weeks due to the emergence of the COVID-19 Delta variant and the decision by many firms to step back from sending their employees on business trips.
“I’d say it’s a pause, as compared to continued growth. That said, we understand why it’s paused,” Ed Bastian, the chief executive officer of Delta Air Lines, told The Wall Street Journal.
Airlines have been one of the sectors most impacted, even though The Journal pointed out that summer air travel reached 40 percent of the pre-outbreak level, which was short of the 60 percent that the industry hoped for. Business leaders have expressed trepidation about sending their workers abroad.
The report pointed to a survey by the Global Business Travel Association that found about 21 percent of travel managers said their companies have put into place some form of travel restrictions, and another 25 percent said their employer was weighing that option.
“We’re not traveling internationally, period,” Paul Knopp, the U.S. chief executive of KPMG, told the paper. “We use Microsoft Teams, where I say I can be on three continents in one day.”
These tools are seen as the death knell for business travel. Bloomberg also conducted a survey of 45 large businesses and found that 84 percent plan to spend less on post-COVID travel in the future.
“Having Saved billions from slashed travel budgets during the pandemic with only a marginal impact on operations, companies, banks, consulting firms, and government offices will be hard-pressed to explain why they’d return to their old ways,” the Bloomberg report said.
The report pointed out that business travelers brought in up to three-quarters of airline profits before the outbreak and hotels relied on business travelers for two-thirds of its revenue. Morgan Stanley said hotels could see an 18 percent dip in revenue in the next year.
TREND FORECAST: The Trends Journal has reported extensively on the impact that COVID-19 has had on major U.S. employers, and has predicted that the Delta variant was going to emerge as a major threat to “normal.” (SEE: “DELTA VARIANT= GLOBAL HYSTERIA,” and “SPECIAL REPORT: NEW TOP TREND, COVID WAR 2.0.” )
Moreover, the less business travel and tourism, the harder nations, cities and all the related businesses that depend on the travel sector will be hit. This in turn will bring down tax revenues, lower real estate prices … and consequently push street crime and homeless populations higher in the affected areas.