It’s hard to imagine the post-Covid-19 world in terms of business travel, but that hasn’t kept travel managers from trying. The outlook sounds pessimistic if you view it in terms of projected trips. Evaluated in terms of meeting value, however, it may look different.
Speaking at last week’s Business Travel Show America virtual conference, Discovery travel management VP Yukari Tortorich, Microsoft global travel director Eric Bailey and tClara founder Scott Gillespie illustrated the contours of how business travel may be viewed as the world emerges from the grip of the pandemic and how travel managers may need to adjust their own value proposition—and knowledge base—as companies return to travel.
Mass media company Discovery and technology giant Microsoft each have recovered less than 5 percent of their pre-Covid travel volumes to date, and both Bailey and Tortorich stated categorically that travel will not be considered the default option for business meetings going forward.
“There’s no going back,” said Bailey, who estimated two years of workplace digitization had taken place in the two months following the pandemic, and not just at Microsoft. “The whole world did it,” he said. As a result, face-to-face meetings now facilitated by platforms like Zoom or Microsoft Teams offer a different value proposition and will force would-be travelers to plan differently and more comprehensively to pull the most value out of the trips they do take.
Bailey’s comments initially targeted conference and event travel, for which he said participants historically have counted on “random meetings in the lobby” and the hopes that content would be good and the people they needed to talk to also would be attending. That no longer can be the premise for attending an event.
“We are going to plan more. We are connecting [prior to the event] and setting up meetings and not meeting randomly,” Bailey said. He believes the shift will change supplier offerings, as well. “This is an opportunity for hotels and some other companies to have rooms available to book for 15 or 20 minutes to have a really productive meeting, with out all the noise and distractions.” Participants would come to in-person events prepared to solidify relationships and do the business that must happen in person. He said the same would happen for the individual business trip.
“In the past, if I flew to New York, I would line up maybe three meetings. That won’t be good enough anymore. That will have to be eight or 10 meetings now” to justify the expense, from a dollars perspective, yes, but also from a time perspective and in terms of carbon emissions, Bailey said.
“Getting on a plane does not show that you care. Your dedication to being successful doesn’t have to mean getting on a plane and taking three days out of the office,” he said. Plus, the concept of the office has changed in a way that may impact business travel. “We don’t need people to come in all the time. If you are going to come into the office, that means I have to come into the office to meet you,” which may not be how many workplaces are set up to work anymore, thanks to the all-remote configurations that have been adopted since the pandemic began.
Bailey said travel managers need to embrace the change and begin to deliver on new requirements. “It may be that travel doesn’t have to happen, or it won’t happen in the same way,” he said, noting the focus on trip cost may not endure past the pandemic because lower volumes will solve that issue. “I can’t negotiate my way to $300 million in savings—the cost savings is going to be there.” Viewed per trip, however, he said: “We have a two-page policy that puts a lot of trust in the employees. If they feel [they’re] only comfortable [traveling] a certain way, we have nothing in place to stop that. As people look to add more value for each trip, that may mean the cost of each trip goes up.”
Discovery’s Tortorich agreed with Bailey’s cost-versus-value assessment. She said Discovery had relaxed policies around preferred suppliers as business travel gradually returns.
“Right now, we recognize we have preferred airlines and properties, but we are looking at individual comfort level of using that carrier or hotel,” she said regarding current bookings and trips. As travel management, she said, “we are there as a consultant, but ultimately we want it to be [the traveler’s] decision.”
That may be easy to say right now, given that many market rates are notably lower than negotiated rates. With corporate travel volumes significantly down for the foreseeable future, however, it will be interesting to see how corporate programs react to cost pressure. Like Bailey, however, Tortorich is looking at the value of potential travel.
“Prior to Covid, 40 percent of our travel was for internal meetings,” said Tortorich. “What percentage really requires face-to-face? Relationships are important, and how do you have that relationship? Can it be virtual, or do we need to meet face-to-face? We’ll be looking at that.”
Bailey encouraged travel managers to become experts at the many different types of virtual meeting technologies and platforms, even if that means pushing into new territory for travel management. “There a lot of things that I actually like better about meeting this way,” he said, noting that travel managers will bring more value to the table if they can articulate the value of different technologies to their peers.
Tortorich agreed. “It becomes more important to think about the synergies and the stakeholders you are constantly working with,” she said, adding that many corporates will look to consolidate some internal responsibilities, and travel managers should position themselves to be a knowledgeable resource.
The Risk of Not Traveling
As appealing as it may sound to a budget manager, tClara’s Gillespie warned there are risks in taking the no-travel-needed mentality too far. Yet, he said the trend doesn’t look good so far, according to initial findings from a survey tClara currently has in the field. Gillespie’s conference presentation noted “very high” resistance to holding even “important” meetings in person in 2021, and projected reductions in travel budgets of nearly 50 percent for 2021 versus 2019.
“Post-Covid, the apparently attractive return on investment of virtual meetings is the biggest threat we will face,” he said. “We’ll get past Covid, but we won’t get past the attractive ROI of Zoom meetings.”
The issue, Gillespie said, is that there is no way to calculate an accurate ROI for business travel. “We will never get a consistent scalable way to measure a travel ROI.” So, he said, businesses need to stop going down that road, which they’ve forged for a decade—since the 2008 recession, at least—with little to no success in pinpointing a consistent ROI formula.
Instead, Gillespie urged the industry to look at travel in terms of risk—more specifically, to consider the risk of not traveling when there is a business relationship at stake, a collaboration opportunity, a critical negotiation or, of course, a deal or sales opportunity. He argued that there’s a bigger business risk to not taking these kinds of trips, and one that cannot be mitigated. Whereas the health risk and the cost risk of taking a trip can both be mitigated—perhaps not to zero, but within an acceptable threshold.
With the meeting outcome framed as part of the risk scenario, Gillespie asked, “Are virtual meetings really going to reduce entirely the risk compared to an in-person meeting? You can imagine for a really important meeting, if you force it into a virtual mode, you could make a worse decision and have a worse outcome than if you made that meeting in person.”
Will such an argument get Microsoft and Discovery back on the road at full volume in 2021? Not likely, said those companies’ travel managers.
Bailey agreed with Gillespie, however, that such a decision would all come down to the potential value of the meeting. Pressed on whether Microsoft would try to assess an ROI on a business trip, Bailey responded, “We know what no trips looks like, so we now have a baseline.” He admitted, however, that it wouldn’t be easy.
Gillespie offered an easier and, likely, more pragmatic option: Evaluate the total risk and benefits of the trip.