InnFocus Winter 2022

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TRENDS & INSIGHTS Much of the travel landscape has changed with workforce dynamics (remote work and blended travel or “bleisure”), the efficiency and costs savings of video meetings, and sustainability becoming more significant considerations in the decision to travel for work. Business travel sentiment in July 2022 dropped after showing a healthy increase in May 2022. Recession fears and recent air travel delays are likely adding to further disincentive to travel. Business Travel: Current & Post-COVID-19 (Net Propensity) Feb 2021 Jul 2021 Nov 2021 Feb 2022 May 2022 Jul 2022 Business travel (current) Business travel (post-COVID-19) -13% -29% -32% -31% -23% -27% -43% -53% -49% -56% -59% Feb 2021 Jul 2021 Nov 2021 Feb 2022 May 2022 Jul 2022 Feb 2021 Jul 2021 Nov 2021 Feb 2022 May 2022 Jul 2022 Source: STR ©2022 CoStar Group Business Travel is Not Going Extinct The good news is just under half of business travellers do plan to travel in the next 12 months. Consumers are travelling for business, just not at the volume the industry had grown accustomed to pre-pandemic. Additionally, a recently released Global Travel Association report cites global business travel coming back albeit against significant headwinds. Booking trends tracked by technology company, Tripbam, reported at the Hotel Data Conference, showed corporate bookings trending up over the past couple months— although still well below 2019 levels. What Type of Business Travel will Return? Travel for group events (defined as an event requiring a room block of 10 or more rooms) has already made significant strides in recovery as evidenced by the rise in US group demand over the last six months (relative to the matched month in 2019). June 2022 group demand was at 95% of the 2019 comparable. As most group events, historically speaking, tend to be business focused, it is an encouraging sign that this type of travel is already returning. Of course, it is important to acknowledge the shift in groups during the pandemic to those that are leisure-based (weddings, traveling youth sports, etc.). The continued strength of group travel is further highlighted by the business travellers surveyed who were asked about the types of business travel they plan to take in the future. Business travel for group gatherings was the travel type perceived most positively. Almost two-thirds of consumers plan to travel the same or more for group gatherings, such as industry conferences (63%) or training and team building events (61%). The increase in remote workers could be influencing this need for teams to gather and may become a more significant business travel segment in the future. It is important for the hotel industry to understand potential 22 InnFocus
Types of business travel in the future compared to Pre-COVID-19 63% 61% 54% 54% 50% 46% In-person industry events / conferences / exhibitions Training / team building events Face-to-face meetings with customers Visits to company HQ / regional offices Face-to-face meetings with colleagues Face-to-face meetings suppliers/vendors Source: STR ©2022 CoStar Group new traveller types and respond by thinking about the needs of this business traveller. Potentially setting aside small areas for team meetings and adapting F&B options around a working lunch are possible changes that can help, along with creating relationships with businesses in the area who have a large remote worker base. The types of travel Understand potential new traveller types and respond by thinking about the needs of this business traveller. perceived less positively were individual, face-toface interactions. Travel to meet with customers and visits to company HQs ranked after the group travel types with over half planning to travel at the same or greater levels. It was surprising to see that meeting with customers did not rank higher given industry anecdotes about sales teams eager to beat their competition in the quest to re-engage with customers. Further exploration of the data showed that for the high-frequency business traveller (6+ trips annually), who is more often in sales, meeting with customers jumped to the top in ranking. The lowest ranked types of business travel were for individual meetings with colleagues and suppliers/vendors with around half planning this type of travel at the same or greater levels compared with pre-pandemic times. Worker adaption and use of video technology makes conducting these types of meetings an attractive alternative, which may explain why the need to travel for these types of meetings is perceived least positively currently. The Business Traveller of the Future Presents New Opportunities While business travel’s future is unclear, there are two things we would label as certain. Business travel will not go extinct and, given that the future of work is changing, the future of travel for work is going to change as well. These changes present new openings for the industry to target the new business traveler. The pandemic has disrupted traditional behaviours. This disruption presents hotels with an opportunity to engage with travellers in perhaps previously unseen ways. InnFocus 23
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