With Planet Earth in lockdown, our industry at a standstill and many of us in self-isolation or quarantine at home, or grounded, this is our blog for you – it’s a way to share stories within our community, to form solidarity and foster a sense of belonging.
Short essays on what we are each doing, how we are getting through this darkest hour in travel, how are we handling withdrawal symptoms from travel, what we intend to do with this down time, a word we want to focus on, a wish we have or simply, an important topic you want to share with your travel friends at this time.
Johnny Thorsen, travel technology innovator
• This article first appeared in Business Travel News
This is not the end of a Hollywood blockbuster or a great new advert. It is the end of corporate travel as we have come to know and love it for more than 20 years. I am strong supporter of the travel industry and personally ready to travel almost anywhere, but I cannot see how our beloved (and sometimes hated) industry can bounce back without some dramatic changes happening in a very short time period. This article outlines some of my areas of concern and, more importantly, some areas of big opportunities as we start looking at 2021.
“Wow! You Are So Lucky You Get to Travel”
I still remember that sentence being spoken by several of my best friends back in Denmark in the early nineties when they heard I was going to cool places like Nice (Amadeus development headquarters), London (Sabre EMEA headquarters), San Francisco (birthplace of the online travel industry) and of course Barcelona, Miami, Marrakech, Chicago and Vienna for various industry events.
Back then, it truly felt like you were one of the chosen ones if you had a paying job that included real business travel. In many ways we have been pushed back to a similar environment by Covid-19, as it no longer is a given that everyone can—or is willing to—travel on a weekly or monthly basis.
What will Prevent a Full Bounce-Back?
Let us start with the obvious one—talent, or perhaps lack thereof. Virtually all major travel industry players have started a dramatic downsizing effort or will be doing so very soon. The first people to leave, typically, are the ones most likely to get a new job elsewhere because they have high talent and skill levels. This means we are likely to see an exodus of quality people within the digital innovation area, as they typically are quite expensive non-revenue-driving individuals who create new systems and services but rarely deliver new business or service actual customers. This mass exit will lead to a lower level of innovation, which will result in a slower recovery from the crisis. Travel needs smart, intelligent and open systems to manage the new service delivery framework.
Secondly, we need well-operated and financially strong airlines to deliver a global operating backbone. Despite an extended period of sustained growth and profit, the reality is that most airlines will run out of cash within three months. They will get various levels of funding from governments to survive for another three to six months, but once they start operating independently with a much smaller business volume, they will be forced to reduce schedules and capacity and also reduce their investments in technology and service innovation. This typically leads to the third problem, which is higher airfares.
Imagine if the average cost of flying one hour goes up by 50 percent and remains at that level for the next three years. That will have an immediate negative impact on global travel, as half or more of all flights in 2019 represented a low-cost service, delivering an endless stream of business and leisure passengers to almost any destination in the world. Despite the current fall in oil prices and subsequent lower cost of aviation fuel, the lack of actual flight capacity (perhaps also empty middle seats) will probably lead to higher prices.
The next item to think about is the sustainability angle. While overall CO2 emissions obviously will be much lower in 2020 than 2019, the measurement of emission per passenger kilometer flown will probably go up as flights might be less full (again, potential for empty middle seats). Furthermore, airlines will delay upgrading the actual aircraft from the old fuel-eating engines to a newer fuel-efficient version due to the low cost of aviation fuel. That said, we will likely see an overall reduction in flight activity per traveller on average, and we all have seen or heard about the rapid improvements Mother Nature has experienced as a result of the slowdown in overall pollution levels. For some, including me, this will lead to personal choices regarding lower levels of travel.
And finally, if all the above items are resolved in a meaningful and positive way, we still need governments to agree on transparent, easy-to-explain and reliable rules for how travellers from other countries will be treated if there suddenly is a change in their medical status. Covid-19 could mutate, and we will likely see new outbreaks and new quarantine rules introduced overnight. How will all the countries in the world address this in a trustworthy and easy-to-communicate model, regardless of where you are from and have gone to? No corporate travel program will overcome medical realities and the geopolitical obstacles that follow.
Managed Travel—What Now?
Travel managers should get ready for a few years of limited travel where the local destinations inside their country of residence probably will become the new top 10 frequent destination list. They should also prepare for a virtual travel experience nirvana with new ways of going to your old favourite locations. Providers of these new services are not visible today, but based on my own findings and conversations the past few weeks, I look forward to hearing about how these new startups will deliver technology and services we need to restart travel at a minimum level in 2020 and then hopefully get to 50 percent of 2019 volumes by end of 2021.
If you are a global travel manager, you should start preparing for how your position will evolve inside the company you work for. The travel program is no longer about getting the best price, but rather about enabling the right people to travel under a “safe-way protocol” when a trip cannot be avoided—quite a change from the old world.
It will quickly become clear that you need to change the allocation of your time to reflect this new environment. Perhaps you should remove the hotel RFP from your to-do list and focus on more important items like safe-travel protocol, travel profiles for medically fragile employees, new reason codes for physical travel in general and, of course, the introduction of a green travel policy, just to give you a few ideas. Perhaps also take a close look at what technology components you will need in order to deliver and manage the new service framework.
It might also be worth looking at how your travel technology stack is compiled. How many of the services you use today are provided by your TMC, and how many provided by independent travel tech providers? Will they all survive the Covid-19 crisis, or should you prepare for a sudden change of the tech infrastructure? You may need a new range of services to support the future travel program. Look at who can provide these in the most reliable and efficient way, and decide if your company is prepared to invest the time and energy required to engage with the companies that can deliver what you need. This is likely to include startups that will deliver new services you once didn’t need.
Travel is not gone. It will come back. If we look five years into the future, we are hopefully somewhere between 75 percent and 100 percent of 2019 corporate travel volumes according to many experts. However, we could also be hovering around the 50 percent mark. Would this be negative? It might mean we have succeeded migrating our corporate behaviour from a “must meet in person” mentality to a “let’s only meet in person as a last option” one, with massive savings on the travel budget as well significant reductions of carbon emissions. Both are likely to make a positive impact on the profitability of the business and especially on the environmental front.
I believe I will travel less in the future, both for corporate and leisure travel purposes. We may perhaps again feel privileged and lucky every time we go to the airport to board a plane. Many of my friends—both in business and personal life—are sharing that view. So perhaps we should stop focusing on whether travel will bounce back to the old levels or not, and rather focus on how travel will deliver value and benefits in the future.
Note: We will be running this blog for as long as we need to, to get us through this. If you wish to contribute, please send your essays to Siew Hoon. Send images too, it’s your story.
This article represents Johnny Thorsen’s personal views and not those of his employer.
• Featured image credit: Andrew_Mayovskyy/Getty Images
