Without a doubt, the travel industry was one of the most affected sectors due to the COVID-19 pandemic. But as we transition to a new normal, businesses are now replanning their corporate T&E to better adapt to the evolving nature of business travel.
Although no one can predict what may happen in the last few months of 2021, emerging trends in corporate travel already serve as the basis for your decision-making. This article highlights the new trends in corporate travel and expenses so that you can plan your strategy before you schedule your team for their next business trip.
Corporate T&E Trends in 2021
1. Corporate T&E declined in 2020, but it’s slowly climbing back up
When the pandemic first hit in 2020, there was huge speculation about when business travel will be safe again. However, studies suggest that global business travel dropped by 68% from April to December 2020 compared with last year's same period.
With lockdown measures and strict health protocols being the primary causes of this drop, Gartner revealed in a survey of 145 CFOs and senior finance leaders that corporate T&E is the second priority spending when revenue begins to return. A separate study by Statista backs up this insight, revealing that 64% of its survey’s respondents would travel to attend a convention by September 2021.
2. Transition to normalcy is currently underway
As the U.S. slowly reaches herd immunity, travel anxiety has slowly eased. This made organizations redefine the future of work travel, which will likely include workplace flexibility.
According to a McKinsey article, 72% of companies have already adopted a fully remote-working arrangement for a subset of employees. This means a reduced need for employees to hit the road to get to work to get the job done.
While this is the case, around 30% of executives in a separate survey mentioned that their organization is yet to discuss plans for corporate travel post-pandemic. And for those who have briefly discussed the possibility of corporate travel (28%), their plans remain vague and still need further refinement.
3. Corporate trips will depend on who’s traveling
Since businesses cannot eliminate T&E altogether, they must identify who will travel if necessary. There are three essential considerations when deciding whether an employee should be allowed to travel: sector, travel purpose, and whether the trip is domestic or international.
Allow travel for those employees whose role in the organization requires in-person interactions. More often than not, these are major decision-makers who will need to close a huge deal with a potential partner or those who need to visit offshore offices to improve internal processes. These instances cannot be substituted by videoconferencing alone, requiring the person in charge to travel to close deals or tasks.
4. Business travel will accelerate in 2022
As businesses gain pace with business travel growth in 2021, organizations worldwide are expected to resume their domestic and international business travel by 2022. This will be driven by a substantial increase in demand for face-to-face group meetings and international relations.
That said, the Global Business Travel Association (GBTA) projects that by the end of 2024, corporate travel spending would reach $1.4 trillion, which is almost equal to the revenues generated in 2019 ($1.43 trillion).
Even though the organization predicts that full recovery of the business travel segment will come in full swing by 2025, this will depend on a number of factors -- from widespread vaccination dissemination, global travel policies, and COVID-19 variants.
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5. There is a shift in corporate travel habits
One of the most notable changes in corporate travel is how newly remote workforces have limited the volume and frequency of travel. A report released by Skift states that travel style will change so that travelers will no longer depart from the company headquarters. Instead, they would depart from their homes.
On top of that, last-minute travel bookings are also seen as an upward trend. The unpredictability of the pandemic paved the way for corporate leaders to travel only when there’s urgency. And when there is, frequent travelers would go to itineraries that combined multiple meetings instead of going on a business trip with only one purpose.
6. Business travelers and their employers show hesitation to travel for work
While business travel is expected to make a comeback in the following months, some business travelers are still hesitant to step out of their homes. Unfortunately, the same goes for their employers, who show a decreased willingness to send their managers on work-related travel.
The same Skift study revealed that:
- The willingness of employees to travel for work has significantly decreased, with 31% saying that they are hesitant to go.
- 7% percent of the respondents said that they wouldn’t be traveling for work anymore.
- 39% of employers said that their willingness to have their managers travel for meetings has significantly decreased.
- 13% percent said that they would no longer allow their employees to travel for work.
For these business leaders and employers to feel more comfortable to allow travel for work, more than 30% mentioned cleanliness, social distancing, health and wellness, and hygiene procedures need to be in place to prevent virus transmission during the trip. Thus, it's also vital to etch these procedures into the company's corporate travel policies to ensure maximum benefit and compliance.
7. There is an upward trend in the shift toward cloud-based T&E platforms
Intelligent automation has become a norm, with more people working from home. In addition, managing and monitoring corporate travel and expenses require cloud-based solutions to generate real-time results and more informed decisions.
T&E platforms increase compliance, improve budget liquidity and reduce human error. This is crucial for financial managers and CFOs who are regularly challenged to keep costs at bay. Moreover, with investments in business travel reduced, businesses can allocate these cost savings in other business areas that will generate long-term results.
Final note: Corporate T&E will continue to shift
As organizations worldwide reimagine business travel and management, it is crucial to keep up-to-date with the T&E trends. Corporate travel still proves to be a viable business move to achieve long-term growth, but everyone’s health and safety should always come first.