One way to measure the economic activity in a country or region is to interpret the trends in business travel. The COVID-19 pandemic led to a sudden halt in business travel, as economies literally shut down. When will business travel recover the lost ground?
The second Sunday of June 2021 brought a remarkable milestone reached by the US airline industry. 2.1 million people boarded scheduled flights, a number up 160% when compared to a similar day at the start of the year.
Retail and recreation traveling is roaring back as successful vaccination campaigns make it possible for the US economy to reopen. The trend is visible not only in the United States, but also in other developed economies.
Naturally people feel the need to travel after spending most of 2020 in lockdown. While retail and recreation travel recovered most of its lost ground, one should be cautiously optimistic when it comes to business travel.
Business Travel to Resume Significantly in the Next Twelve Months
The COVID-19 pandemic brought a major change in the way businesses conduct their operations. Remote working became a reality, and Zoom meetings replaced in-person meetings. Hence, business traveling took a major hit – but it did not die.
Most of the countries in the developed world have exceeded 50% of their population having at least one COVID-19 vaccine dose. Vaccine variants, such as the delta variant first appearing in India, pose challenges in the months ahead, but optimism mounts that business traveling will make a big comeback.
The Global Business Travel Report for 2021 suggests that 96% of the respondents are willing to travel within the next twelve months. For that to happen, borders need to reopen, such as the US-Canada border, which is the longest in the world. Moreover, 40% of the respondents said that domestic business travel has already resumed, with the focus now being on international traveling.
Business travel depends on the success of the fight against the pandemic. The sooner the pandemic is brought under control, the greater the impact on economic growth. Keeping an eye on business travel trends helps to identify the stage of the economy in the business cycle. So far, the recovery in business traveling is in its incipient phases, but optimism prevails.