Will business travel recover?

I was just finishing university during the recession of the late 1980s. Finding a job will not be easy, especially in the hospitality industry — an industry that has been hit hard by the crisis.

I remember watching a United Airlines commercial on television (“Speech“), which still resonates in me today. In short, the office manager explains to his team that they have lost their best customer to the competition because face-to-face meetings have been replaced by impersonal phone calls or faxes. He gives each team member a plane ticket to visit each customer so he doesn’t lose any more business. (Watch the one-minute video; I won’t share the powerful ending because that would be a spoiler.)

I thought about this while reading the Hotel News Now article which talks about the challenges of business travel and the art of negotiation. Chip Ohlsson of Wyndham Hotels & Resorts notes, “When I hear that business travel isn’t coming back, I’ll tell you that’s absolutely 100% true until someone loses their first job. When a company loses their first job out there, they’re going to turn to their operational team and say, ‘Get back on the road and go meet the people’.”

This message is echoed by others in the same article.

At Preferred Hotels & Resorts, we’ve seen dramatic growth in bookings across the global distribution system — an indication that business travel is recovering. In fact, we are exceeding our own expectations and expect to reach or exceed 2019 levels next year in this valuable booking channel. Furthermore, we had an explosive year in the group leaders.

Ironically, many hotels do not close those opportunities to grab the highly rated transient business outside. We can talk about the effect of that strategy another time, but the point is that business trips are already coming back. It can develop into a more “leisure” or mixed travel model – with longer stays including weekends.

Adam Sacks, president of Tourism Economics, notes that 34% of travelers plan they travel while working remotely.

As a hotelier, it’s a great feeling to witness the crowds in hotel conference rooms and see business people with laptops in the lobbies. Business travel and the combination of leisure and business travel are here to stay.

In the midst of the pandemic, Fareed Zakaria wrote in his book Ten Lessons for a Post-Pandemic World: “The reason our cities grow and survive, even in the face of calamities, is that most of us are naturally drawn to participation, cooperation and competition. The rationalizations of city life vary…but beneath the more obvious reasons lie deep urges for social interaction and connection—we are social animals by nature.”

At the end of 2019 Google shared that Tokyo is one of the world’s 10 most popular destinations mainly because of the 2020 Olympics, which were expected to be held in more conventional circumstances, but also because it is an important global business hub. And sure enough, when Japan reopened its borders to international arrivals in October, we saw a flood of bookings – both leisure and business – at our hotels through 2023.

The pent-up demand for travel and the need to resume business meetings underscores what the boss said in that United Airlines ad. It may have been more than 30 years, but the message is the same: Face-to-face business, with a handshake, cannot be replaced by technology.

I’m proud to work for a company with beautiful hotels that have just the places and spaces we need to be social. Here’s to the return of business travel — whatever form it takes, we’re here to make it happen.

Rhett Hirko is Global Vice President of Revenue Optimization for Preferred Hotels & Resorts.

The opinions expressed in this column do not necessarily reflect those of Hotel News Now or CoStar Group and its affiliates. Bloggers posted on this site are given the freedom to express views that may be controversial, but our goal is to stimulate thought and constructive debate within our community of readers. Feel free to contact the editor with any questions or concerns.

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