A record-setting holiday weekend for travel does not include business travel, which has been slow to grow.
Airlines are reporting record leisure sales.
Business travel, which represents a large portion of profits, continues to slump as businesses continue to adapt to economic stressors and remote work.
The Global Business Travel Association projects that the worldwide airline industry won’t return to pre-pandemic spending levels until mid-2026.
Why it’s important
The slump in business travel sparks uncertainty for the airline industry, especially as analysts are predicting that the recession will cool travel in the coming year and send even more businesses to rely more heavily on Zoom or other remote options for conferences or meetings.
“My guess is that heading into a recession, it’s going to be difficult to sustain the performance of the summer. People are going to be more efficient in their traveling,” says AlixPartners consultant Eric Bernardini.
Leisure travel may buck this trend. Americans have been eager to embrace travel and vacations in the aftermath of the COVID-19 pandemic, which has been a major driver in increased travel.
“Despite concerns that consumers would be deterred by inflation and would want to avoid paying expensive airfares amid a weakening economy, airline executives said Wednesday that leisure bookings aren’t ebbing,” says The Wall Street Journal.
Backing up a bit
The Transportation Security Agency reported that this Labor Day week was a record-setting one for travel, with 8.76 million people going through checkpoints. This is the highest it’s been recorded since Labor Day 2019 with 8.62 million people.
Typically, leisure bookings begin to drop in August and September. Major airlines are not reporting though however.
“As we get past Labor Day, our leisure bookings remain strong. There was some question about whether that would hold,” says American Airlines CEO Robert Isom.