It will take two to three years for business travel to fully recover
The Business Travel sector will need two to three years to recover the figures of 2019, according to a study published by Gebta and Braintrust. Medium-sized companies, with a lower level of internationalization and a model based on the domestic market, are the most mobile in the covid-19 scenario. The crisis will provoke a notable movement, concentration and disappearance of suppliers.
While business travel has improved markedly since the drop experienced during the first phase of the health crisis, which saw a drop of more than 95%, activity levels at the end of September are still well below pre-pandemic levels and, overall, hover around 30%;at the end of September remain well below pre-pandemic levels and are, as a whole, around 30% of those recorded in the same period of the previous year.
The projections in the document prepared by Gebta and Braintrust estimate that by the end of the 2020 financial year activity levels will still be below 50% compared with the previous year.
According to the study, it will take at least two to three years to return to the same levels. At the close of the 2019 financial year, the volume of investment in business travel by Spanish companies will reach 12,800 million euros, just over 1% of Spain's total GDP .
The report identifies the economic sectors most active during the pandemic and the changes registered after its outbreak. In 2020, it is the SMEs those who are generating the greatest volume of travel, with some exceptions depending on the sectors of activity.
The composition of spending contrasts with that recorded in 2019, in which 45% of total investment corresponds to 2.4% of Spanish companies;olas de mayor tamaño, 43% to companies with a turnover between 1M and 50M euros (43%) and the remaining 11% to smaller companies.
The differences identified are mainly attributable to the application, by large corporations, of more restrictive travel policies and a greater dependence on international markets, particularly long-haul markets.
Small and medium-sized companies, generally more focused on domestic and local markets, will be applying more flexible business travel policies.
The first industries to travel will be those in the pharmaceutical, food, e-commerce, distribution and telecommunications sectors, followed by industry, agriculture, logistics and insurance. The latest will be banking, retail, leisure and tourism.
In terms of speed of recovery by type of trip, commercial trips will be the first, followed by internal company trips for training and small meetings. Major events come in last.
The current global economic crisis has accelerated other business processes, such as the relocation of supply chains, and has led to other problems, including economic tensions and a slump in demand, with a very significant drop in travel volume.
THE ROLE OF AGENCIES
On the other hand, the role of business travel agencies is becoming essential, with an increase in their share, thanks to their added value in times of uncertainty and risk. In fact, research shows that, although the size of the market will decrease over the next few years, agencies will see an increase in their share of the market in times of uncertainty and risk;increase their share from 40% of total corporate travel in Spain to more than 50%, taking business away from OTAs and direct sales.
This fact is mainly due to the value that agencies have shown since the beginning of the crisis, managing travelers' locations and subsequent repatriations, working intensively on changes and refunds from end suppliers that otherwise would have been difficult to carry out.
For Marcel Forns, CEO of Gebta, “the main challenge for the different actors in the value chain, which we must face together, is to facilitate access to information in an organized manner, with the aim of accompanying companies both in making decisions that affect travel and in improving processes”.
CONCENTRATION OF THE INDUSTRY
The study also shows that, although the crisis will lead to the disappearance of many companies in the sector and the concentration of others, it will also lead to the concentration of others;Others will also see the birth of other companies and other models more adapted to the reality of the coming years, which will be linked to digital transformation and omni-channeling.
Falling revenues, gradual loss of profitability, liquidity issues and business model difficulties in the short, medium and long term will be the triggers for the next developments we will see in the travel industry worldwide.
According to Ángel García Butragueño, director of Leisure and Tourism at Braintrust, “the most important thing will be collaboration and not competition to cross the desert to reach a new oasis in two or three years. The new vectors that will mark the optimal management for companies will be People, Profit & Planet, and only business travel agencies will be able to ensure these three objectives in favor of clients.