Recovery in business travel, what are the prospects? The number of trips goes up very slowly due to two factors: the stabilization of the smart workingwhich involves a greater use of digital platforms at the expense of travel, and an increase in energy prices caused by the Russo-Ukrainian war. On this issue Francesco Galletticonsultant for the Scenarios & Intelligence area of the consulting firm The European House Ambrosettiheld a lesson during MissionForumthe Newsteca event on March 29 last.
Recovery in business travel, the trend is slow
The Covid-19 pandemic has had never before seen effects on business travel.
According to The European House Ambrosetti, in 2020 there was a decrease five times higher than that which had occurred in 2001 following the collapse of the Twin Towers: if after 11 September, in fact, company travel had decreased on average by 10.9%, in 2020 the decline was 51.5%. And the recovery is there today, but it is slow.
For the moment, in fact, only 67% of Italian companies agree domestic travel (against 40% recorded in February last year) and 29% international ones (compared to 10% in February 2021). “Well 30% of workers – says Francesco Galletti – still prefers to travel less compared to the past, even if there are 55% who want to travel as before and 12% intend to make more trips ».
Restart of business trips, choices related to mobility change (even in the city)
The mobility choices of Italians have radically changed, and this affects the recovery in business travel.
From the study presented by Francesco Galletti it emerges that even today, commuting for work is less than in the pre-crisis period, even in urban areas. «In most cases there is still a trend in travel down by 10% compared to 2019. The preferences of travelers in terms of means of transport have also changed. 84% opt forprivate car69% for the bike sharing66% for it scooter sharing61% for the car sharing and 59% for i scooters for hire. Public transport, on the other hand, ranks last with a percentage of 43%. Right on public transport the heaviest unknowns weigh for the future ».
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There is no longer a correlation between business travel and GDP
One of the effects of the pandemic was that the correlation between GDP and business travel was broken which, for years, was the basis of a study that The European House Ambrosetti carried out in collaboration with Condition Gbt. The data collected anticipated Istat data by over 45 days.
Galletti: «Starting from 2020 this correlation has ceased: actual travel has almost disappeared and business travel spending has dropped by 63%, compared to -8.9% of GDP. A trend that also affects 2021 ».
Resumption in business travel, this is how much the market grows
Last year, compared to the previous year, there was an increase in the business travel market in Italy of around + 16%. But this pace of growthexplained Galletti, appears insufficient to be able, over the next 5 years, to recover all the lost value.
Based on the processing of data from the Observatory on business travel in Italy in 2021, carried out by the Politecnico di Milano and the University of Bologna, it is expected that in 2022 the BT market will reach 10.8 billion euros. A volume that represents 52% less than the 20.6 billion in 2019, even if it marks an increase compared to the 7.6 billion in 2020 and 8.8 billion in 2021. “Assuming an increase in the sector based on the trend of GDP, in 2025 the market could be just over 15 billion eurosGalletti said.
The unknowns that could row against
But what are the unknowns for the future of business travel?
Two in particular: the stabilization of smart working e le inflationary dynamics of energy prices, factors that could slow the recovery. “With regard to smart working, before the pandemic Italy was the most backward country in Europe. But due to Covid-19 it was the one that recorded the strongest increase. In 2020, the percentage of workers who carried out their business from home increased by + 12.2%, against the + 3.6% recorded in 2019. This, translated into numbers, means that about two years ago 2.2 million employed they could carry out their business almost entirely from home “.
After all, during lockdown 90% of large companies and 73% of medium-sized enterprises have introduced or extended the agile work. And even small and micro enterprises were no less: the percentage was, respectively, 37% and 18%.
Will we still work at home in the future?
Based on these data, The European House Ambrosetti predicts that by 2025 the share of Italian workers in smart working may be around the 25% for medium-large companies (with peaks of up to 40% in the services sector), thus aligning itself with the averages of the most advanced countries.
Consequently, the spaces inside the offices they will decrease by about 30%. This could result in a decrease in daily shifts towards workplaces and a stabilization of business meetings on the platforms of videoconference. The consequence could be a decline in business travelwhich would be carried out almost exclusively by the managers.
Travel and mobility managers, therefore, would find themselves facing greater organizational complexities and having to value them more and more digital tools.
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Impact of expensive energy
It will also affect the future of business travel rising gas and oil prices caused by the war in Ukraine.
We could in fact witness a generalized increase in transport costs. This could provoke, on the home-work front, a push to use collective means to the detriment of private ones. There may also be a increase in agile work and, as regards business travel, a significant one reduction in the number of trips.
Sustainability and digital tools, the levers of the new normal
What will be the strategic levers for the restart?
According to Galletti, the key elements remain there digitization and the sustainability. «Today, companies are very keen to manage travel with digital tools. And 98% of companies have started a process of digitizing their own travel management“, points out.
The study also shows that 67% of businesses have introduced digital reporting systems expenses incurred while traveling. And that digitization weighs heavily on investments: in the two-year period 2020/2021 the percentage of turnover was 5%against 1% in the 2018/2019 two-year period.
This process, however, finds an important brake in the lack of adequate skills. «As many as 51.5% of companies stress that this is the biggest obstacle they have to face in order to make the most of opportunities offered by data».
Green solutions in travel management
With regard to sustainability, the processing of data by the Business Travel Observatory shows that today 85% of companies adopt solutions based on sustainability.
In particular, 78% use digital workplace to reduce travel. Only 9% introduced one green travel policy. Additionally, another 9% have a budget dedicated to offsetting the CO2 emissions produced by the company.
New challenges for travel managers
In this scenario, companies will have to face new challenges: for example, they will have to find a balance between physical and digital encounters. In addition, they will have to better manage travel costs and digital services, as well as develop policies that are increasingly oriented towards sustainability. Hence, travel managers will have a increasingly consultative role.
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