(NewsNation) — After all but disappearing during the pandemic, business travel is starting to show signs of life, although industry experts say a full recovery could still be years away.
According to recent estimates from the U.S. Travel Association, an industry trade group, domestic business travel volume is expected to hit 81% of pre-pandemic levels this year and could reach 96% by 2023.
The latest projections suggest corporate travel is bouncing back despite surging inflation and casts doubt on the idea that remote meetings will replace business travel altogether.
“It’s always going to be important to have employees face-to-face with each other and I think you’re seeing some business travel returning for that very reason,” said Clint Henderson, managing editor of news at The Points Guy, a travel blog.
Although it’s impossible to know when corporate travel will ultimately return to 2019 levels, Henderson said it probably won’t happen before 2024 and may take until 2026.
Much of the recovery will depend on international business travel, which remains far below pre-pandemic levels, particularly travel to Asian countries like Japan where COVID restrictions are still in place.
But polling suggests companies are far more willing to send their employees abroad now than they were earlier this year. According to an April survey by the Global Business Travel Association, 74% of companies say they sometimes allow non-essential international business travel, up from 48% who said the same in February.
WHY IT MATTERS
For most Americans who don’t travel for business, the return of corporate travel is still worth paying attention to.
As long as companies continue to keep their employees on the sidelines, leisure travelers may have an easier time booking seats and they have a better chance of getting upgraded.
On the flip side, the reduced corporate demand could be partially responsible for higher prices as airlines attempt to recoup lost revenue.
While corporate travelers make up about 12% of passengers, they can account for as much as 75% of profits on certain flights. That’s because they tend to book more expensive seats and last-minute tickets.
“Business travel was great in that it sort of subsidized economy travelers, that’s not the case anymore,” said Henderson.
For that reason, a resurgence in business trips could mean a drop in prices for everyone else.
hotels boosted by leisure travel
Business travel revenue for U.S. hotels has improved but is still expected to end the year 23% below 2019 levels — a $20 billion drop-off from before the pandemic, according to an April report from the American Hotel and Lodging Association (AHLA).
Despite the lagging recovery, this year’s projections mark a significant improvement from 2021, when hotel business travel revenue was down almost $60 billion compared to 2019.
Urban markets, which rely on business conferences and events, have been hit especially hard, the AHLA found.
Some of that pain will be offset by surging travel demand among American consumers, which is the strongest it’s been in decades. Hotel room revenue is projected to reach $188 billion by the end of this year, which is higher than 2019 levels on a nominal basis but slightly lower when adjusted for inflation, AHLA estimates.