Air travel took a dive during the pandemic, and its recovery so far has been anything but smooth sailing.
- Leisure travel is back now that most restrictions have been lifted. However, business travel is still struggling to return to pre-pandemic levels.
- A recent Deloitte survey revealed that business travel is not expected to return to pre-pandemic levels until 2024, even though leisure travel has surpassed previous numbers.
- Reduced business travel is influenced by cost, lack of conferences and events, and climate concerns, Fortune reports.
Why it’s news
Fewer business people traveling for work means fewer customers for airlines—meaning cost cutting, fare hikes, and other measures to maintain the business. Though business travelers only account for around 12% of all airline passengers, the higher rates charged for business-class seats mean that these travelers account for up to 75% of airline profits, according to Investopedia.
Though business travel is down overall, international travel is recovering more quickly than domestic travel. Around 33% of all U.S. business travel is international—an increase from 2021, when that number was 21%.
Corporate spending on travel is expected to reach 57% of its 2019 rates by mid-year. By the end of the year, analysts anticipate it will reach two-thirds of 2019 levels. A full recovery is not expected until the end of 2024, Fortune reports.
The decline is partially related to fewer corporate events for businesses. Conferences and live events have just started to return this year. The resurgence in corporate events has begun to push travel spending back up. After years of virtual or altogether canceled events, businesses are ready for a return to the previous norm.
But available activities may not sway all businesses. Some company leaders are beginning to consider the climate effects constant business travel could have. About one-third of U.S. companies and 40% of European companies have committed to sustainability targets that will require them to reduce business travel by 20% per employee, Fortune reports.
Air travel will continue its upward trend, but how high it will actually go is undetermined. With a greater focus on reducing costs and cutting carbon emissions, companies may never return to previous levels of business travel.