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Air travel is back for tourists, but not for business travelers — Quartz

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A 2021 study conducted by Morgan Stanley suggests that corporate travel managers in the US, Europe and Asia will replace about a quarter of typical business trips with virtual meetings in 2022.

Their predictions were pretty spot on.

Air travel is almost A strong recovery in tourist demand in the US and Europe has returned to pre-pandemic levels. However, business travel has been delayed and several major airlines report corporate sales are still 20% below 2019 levels.

In recent quarterly earnings reports, the four largest U.S. airlines (Delta, American, United and Southwest) all told investors corporate travel sales were at about 80% of pre-pandemic levels. . “Our biggest companies are lagging behind, especially banking, consulting and technology, which used to be among the top companies,” said Andrew Watterson, Southwest’s chief commercial officer, during a July 28 conference call. I was a traveler, but now I’m inferior.”

Leisure travel is a bright spot for airlines

But leisure travelers are picking up the slack. Currently, the number of air travelers passing through US security checkpoints is about 10% below the total number of passengers in 2019.

Eurocontrol data shows a similar trend in Europe.

Business travel lags behind tourism

A recent case study from the Peterson Institute for International Economics confirms that the recovery in tourism and business travel is on two separate trajectories. The study, released July 28, examines ticketing data for major European airlines (the researchers did not name any conditions for accessing their own data). While the airline’s tourism destination bookings have already recovered to 2019 levels, business destination bookings have only recovered to 80% of his 2019 level.

Businesses are tightening their travel budgets

Airlines have told investors they expect profitable business travel sales to rebound soon. But corporate travel managers responsible for booking flights for large companies aren’t so sure.

Of the 150 travel managers surveyed by consulting firm Deloitte in February, less than a fifth predicted that their company’s air travel would return to 2019 levels by the end of the year. This is a far more pessimistic outlook than when Deloitte conducted the same survey last year, with a majority of respondents believing business travel would return to normal by the end of 2022.

A slow recovery in business travel may indicate that companies are implementing plans to cut fat from their travel budgets. Video calls have replaced the most expensive and least necessary business flights, and those business trips (the last 20% of business flights that never return) may never return. A Deloitte consultant wrote in his April report: all From the beginning of 2020, the A few for the foreseeable future. ”