Corporate Air Travel Affected by COVID-19, to Recover Slowly, says Beroe Inc
Source: PR Newswire
With the COVID-19 outbreak forcing the corporate world to work on cost-cutting strategies, travel spend is expected to experience heightened management to discover newer cost-saving opportunities.
Raleigh, North Carolina, Aug 05: With revenues hit due to the COVID-19 outbreak, companies are looking for ways to cut back on their expenses. This has brought attention to corporate air travel. Pre-pandemic, corporate travelers represented about half of all major airline revenue, amounting to 1.7 percent of the global GDP. However, owing to the ongoing crisis, airline travel for business is expected to shrink permanently by 19 percent.
"When travel restrictions were imposed worldwide, businesses replaced direct meetings with virtual ones to contain the pandemic’s spread. Many businesses adapted to virtual meetings and have realized that not all meetings must be in-person. Businesses have also realized huge cost savings on air travel spend," said Anusree Mohan, Senior Analyst at Beroe. "In the future, airline travel will be a more mindful and thought-out way of traveling, allowing employees to have a better life balance and employers to have a better return on investment."
Companies are organizing virtual meetings and this model has become more preferred for many of them. They have realized that in-person meetings are not always required. The post-pandemic hybrid work model that combines face-to-face and virtual setups can make businesses successful while limiting the company’s travel costs. Employees should travel only when it is of utmost necessity. Here are some of the measures being taken by companies to reduce airline business travel and bolster revenue:
- Cost management: Almost every industry is facing difficulty due to the pandemic to varying levels. In that, the companies are actively looking at revenue-generating measures wherever possible. Restricting business travel is at the top of their list, wherein they are canceling all non-essential travels.
- Taking advantage of the technology: To curb the pandemic, travel restrictions have been imposed worldwide. So, companies have now adapted to the virtual model. They have realized that in-person meetings are not the only way. Virtual meetings can source huge savings on travel spend. This also allows the company to unlock greater returns and provide desired life-work balance to the employees.
- Health & hygiene considerations for the employees: In the pre-pandemic era, businesses focused extensively on cost. Employee health and hygiene measures have never become so important. Employee safety is the prime concern now. Companies follow a duty of care by ensuring the airlines follow some mandatory health protocols. Travel decisions are being taken based on the travel providers’ safety measures and if the employee is willing to travel or not.
In the ongoing crisis, flight fares remain unpredictable, and they are expected to stay highly volatile per the airline strategies. This makes it difficult for companies to find the best price for corporate travel. As a result, to improve air travel spend, they have started depending on third-party travel solutions. Travel agencies have proved to be better partners for the corporate world, thanks to their 24/7 seamless services, global support, technology-enabled tools that assure minimal travel disruptions, and an increased focus on traveler’s safety.
“Businesses have suffered around the world in this pandemic. Thus, cost-cutting will remain their prime focus at least for the coming few years. And this will mean fewer corporate air travels. In fact, a small portion of business travel, like intra-company meetings, might be completely replaced with technology”, said Anusree Mohan, Senior Analyst at Beroe. “Employee travel rate will decrease as corporate customers will remain concerned about health and safety. Travel managers will focus on the new post-COVID business travel policy. It must include health and hygiene concerns for the employees while keeping a restricted travel budget in mind.”
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About Beroe Inc
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions — leading to lower costs, greater profits, and reduced risk. Beroe has been providing these services for more than 15 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies. For more information about Beroe Inc., please visit https://www.beroeinc.com/.