The business travel market is in for a shake-up as it recovers from the pandemic. Photo / Getty Images
The business travel market is in for a shake-up as it recovers from the pandemic. Photo / Getty Images
One of the world's largest travel management companies, FCM, expects a significant rebound in its global corporate travel business by the end of the year to 50 per cent of pre-Covid levels.
The business operates in more than 95 countries, including New Zealand, and says sales will continue toincrease globally. The findings out today are in line with a survey by Global Business Travel Association (GBTA), which shows more firms have resumed travel or plan to than at any time during the pandemic.
FCM says vaccination programmes are well under way in key markets, and gaining momentum globally, and as consumer confidence increases, the corporate business' profitability remains on track to return late this year.
At the end of last month, the Flight Centre Travel Group company was trading at 29 per cent of the previous year's levels globally, but had developed a strong organic growth profile, fuelled by a combination of high customer retention rates and record new account wins during the pandemic.
Marcus Eklund, FCM global managing director, said that based on early signs that vaccines are effective in preventing symptomatic infection, and with healthy vaccine rollout plans in key markets such as the Australia, New Zealand, the United States and Britain, health risks were expected to fall.
''In the absence of disruptions such as new strains, this should lead to an easing of government-imposed restrictions on domestic and international travel, and a partial rebound of the global business travel market by year end,'' he said.
''Based on our experiences, travel immediately rises by 20-30 per cent when restrictions are relaxed. A healthier rebound will occur if international borders remain open."
Eklund said mining, construction, pharma, energy and resources, fast-moving consumer goods manufacturing industries and their associated supply chains, together with governments and other growth companies, were responsible for most business travel last year.
''They will also drive early growth this year, as their C-suite, customer-facing and sales executives recommence their traditional customer and team engagement.''
''Confidence in business travel will fundamentally change as a result of consolidation and structural changes in the market. It is essential for the corporate travel industry to be highly adaptable to rapid change. ''
He said it must also offer a greater number of services in health, safety and customer communication remain relevant. These are the areas we have focussed on and invested heavily in for the benefit of our customers during the pandemic and during the recovery phase.
Business travel is showing signs of lift off as vaccination programmes roll out. Photo / File
Global research has revealed more than half of all employees expected to work from home several days a month.
As a result, Eklund expects some pre-pandemic travel activity will shift to virtual working models, leading to further consolidation in the corporate travel industry, as organisations increasingly seek travel management providers that are secure and demonstrate a strong duty of care.
He said that FCM was in a strong position to take advantage of a smaller industry as a result of the shake-out.
The GBTA last month released a survey that showed nearly one-quarter of respondents report that their company has resumed non-essential business travel, or planned to.
The latest poll showed multiple positive signs for business travel recovery, including an increase in willingness to travel, a decrease in trips cancelled and a more optimistic view towards returning to the road as travel bookings continue to increase.
About one in 10 (9 per cent ) poll respondents say their company already has resumed non-essential business travel, while an additional 13 per cent report their company now has in place a fully developed travel-resumption plan.
Additionally, 31 per cent of respondents say their company is actively working on a travel-resumption plan, while 20 per cent say their company has begun the process, but has more work to do. Only 18 per cent report no formal planning, and 7 per cent reported being unsure.
GBTA polled its members across the globe from April 12-17 with a total of 942 responses. The association's 9000-plus members manage more than US$345 billion ($482b) of global business travel and meetings expenditures annually.
Two-thirds (65 per cent) of poll respondents feel their employees are ''willing'' or ''very willing'' to travel for business in the current environment, an increase of 11 percentage points from March poll results.
