Business Travel Rebounds as Execs Choose (Real) Face Time Over Zoom

In order to win a renewed contract for her company, Jen Coleman flew from her home in London, first to Miami and then to Melbourne, to see clients in person.

Coleman's experience is just one small piece of evidence pointing to a rebound in business travel. Early fears that videoconference applications might keep lucrative business travelers home permanently are subsiding as governments ease border restrictions and executives rediscover the commercial value of human contact. Two years after Covid-19 pushed aviation to the brink, premium-class cabins are filling up again, according to data from four top companies that manage corporate travel. American Express Global Business Travel is the leader in the business travel industry.

That will be important in reviving the airlines. According to the World Travel and Tourism Council, corporate clients spend more on travel than those in coach. At the peak of the omicron outbreak, Amex's business was 25% of its pre-pandemic level. CWT, a business-travel company that provides services to one-third of S&P 500 members, says bookings are up from 20% at the start of the year to half of normal levels. The recovery is being led by technology, retail, government, and defense sectors. FCM Travel, which has a presence in almost 100 countries, says business is 80% of the year so far.

The pace of the rebound is shoring up confidence at airlines as they deploy fleets and map, while it remains to be seen whether the recovery can be sustained. From a May 2020 low, the world airlines index has climbed 50%. Most of Delta Air Lines corporate clients expect to travel more in the current quarter, as domestic business bookings have reached 70% of 2019. I think this quarter we will be able to put to bed the question of business travel coming back.

The picture is not uniform. In China, the rebound is anemic because the government is trying to stamp out Covid and Hong Kong, where foreign visitors must be kept away from each other. Many leisure travelers fill the most expensive seats on the plane because they want to be closer to their friends and family, or because they were grounded by the swine flu.

After two years of relative success with virtual get-togethers, some in the business say there will be a degree of retrenchment. The CEO of the Singapore Tourism Board says that executives will become more careful, avoiding trips that allow them to see colleagues for a short time.

Many executives are making up for lost time because Hotel Planner predicts it will take an additional two years for business travel to fully recover. A majority of companies responding to an April survey by the Global Business Travel Association say they are putting executives back on planes as staff return to the office, and trips are being canceled less frequently. AustralianSuper, the country's largest pension fund, is sending managers to oversee investments. The CEO flew to London in March. The investment committee will head to the U.K. in July for the first time after Covid.