Like the temporary blur of a camera lens before it shifts into focus, the picture ahead for business travel in 2022 appears to be sharpening into a clear view despite a bumpy start to the New Year.
Even as omicron variant concerns challenge an industry accustomed to COVID-19 setbacks, the year ahead promises rapid growth. Just how quickly and how far business travel will rebound depends on a variety of economic factors, including evolving variants, supply chain limitations, and staffing shortages. While companies and their travellers can’t control those elements, they can plan ahead and mitigate risk in their corporate travel programs. Below we take a look at where the industry is at today and where it’s heading next with our 2022 forecast.
Coronavirus Variants Projected to Lose Steam
The current wave of COVID-19 has spread so swiftly and pervasively that you would be hard pressed to find anyone working in the corporate sphere who has not been directly exposed or impacted. Yet, with case counts hitting a daily record of 1 million in the U.S. alone, there are now signs that the latest surge will peak in January before falling off at the end of the month.
Unlike past surges, which were characterized by a two-month cycle of peaks and subsequent lows, the far-reaching spread of omicron may finally break this pattern. In fact, scientists are already speculating that it may be the last “variant of concern” as omicron staves off less efficient mutations of the virus.
For businesses, this does not mean a COVID-free world, but it does mean a more a manageable, less threatening form of the virus for vaccinated individuals that occurs on a seasonal basis similar to the flu. Companies should consider this when making changes to their employee wellness and travel program policies. While the same rigorous standards of testing and protocol currently in place may not be required in the future, an overall attention to wellness and encouraging sick travellers to stay home will remain critical.
Navigating Supply Chain and Staffing Hurdles
COVID-19 has consumed the attention of businesses for so long that the full extent of the mess it will leave behind is only now becoming apparent. The constant change and uncertainty of the past two years have left organizational supply chains broken and staffing structures in disrepair.
Take for instance airlines, which have been forced to cancel tens of thousands of flights globally, due to staffing shortages exacerbated by the spread of omicron. While this scale of disruption threatens to wreak havoc on business travel, it can be tied directly to the rise and decline of COVID. According to the latest report from McKinsey & Company, as the virus recedes, so will the pandemic-induced changes to consumer demand and employment trends. Similarly, once the initial backlog created by supply chain disruptions is cleared, the economy can resume pace and even grow.
With this will come growing pains, similar to what business travellers experienced last summer, such as longer wait times and travel suppliers stretched thin. For businesses mapping out their travel for the year, plan in advance to lock in more favorable rates and conditions now before demand climbs later in the year and hampers buyer negotiating power. Add a safety net by booking with suppliers who offer flexible cancellation policies in case predictions regarding the slowing of COVID take longer than expected.
Business Travel Primed for Growth
Despite the temporary setback posed by omicron, experts are bullish on the outlook for business travel in 2022. Increasing vaccination rates, widely available booster shots, and a general eagerness by travellers to return to the road, all hint at a busy year for travel ahead.
Both the lodging and airline industries are planning accordingly. Delta Air Lines predicts its capacity will be at 90 percent of pre-pandemic levels by the end of 2022, and CBRE projects U.S. occupancy levels will fall just short of 2019 levels. Recent research from a variety of sources seems to support these predictions. The U.S. Travel Association expects domestic business travel spending will reach 76 percent of 2019 levels this year, with full recovery by 2024.
Although event cancellations and changes to travel plans are an inevitable part of the recovery process, more businesses are taking a measured “wait and see” approach with each new variant. A survey from GBTA reflects this shift in mindset, with poll respondents indicating their companies were less likely to pause travel plans due to omicron than they were the delta variant. Should a new variant emerge after omicron, it will likely pose less of a disruption to travel, at least not on a widespread scale.
Prepare Your Program
Is your travel program prepared for the next stage of growth and recovery? 2022 presents an opportunity for businesses to shift the focus of their travel programs from a reactive mode to an informed approach that prioritizes taking ownership of the factors they can control.
Direct Travel will be sponsoring a BTN webinar featuring key thought leaders and their insights on this topic, February 10th at 1 p.m. ET. The webinar will explore how to keep your travellers apprised of the latest changes to travel, ways to prioritize the safety and security of employees on the road, and tips for negotiating with suppliers in the new environment. Subscribe to the Navigator blog on the right to be updated when registration opens for the BTN webinar.