The coronavirus pandemic delivered a lingering, and possibly permanent, hit to business travel that is likely to weigh on employment and economic growth in some communities for years. Beyond the blows to airlines, hotels, travel agents and rental-car companies, the drop in business travel is rippling through whole ecosystems of related commerce, including airport shops, downtown bars and restaurants, construction companies building convention stages, entertainers, taxi drivers and aircraft-parts manufacturers.
Domestic and international business travelers in the U.S. directly spent $334.2 billion in 2019, supporting 2.5 million jobs, according to the U.S. Travel Association. But when considering the follow-on effects, it estimates the economic output and jobs supported by business travel were roughly double those figures before the pandemic.
“When a large convention or event is happening, the entire city is involved,” said Tori Emerson Barnes, the association’s head of public affairs and policy. “The florist that provides the flowers, the dry cleaners that prepare the linens, the coffee shop that serves travelers. Whole downtown areas have been revitalized due to the meeting and events business, and they’ve really struggled this past year.”
When global restrictions to control the spread of Covid-19 were put into place last spring, businesses and road-warrior workers were forced to adjust, making sales calls and attending board meetings through videoconferences rather than on-site visits, and adapting to virtual training and networking instead of conference-center seminars.
Executives learned that remote work, to a degree, was more possible than they previously envisioned, which could lessen the need for some types of business travel in the future, even after vaccines conquer the coronavirus. And some companies stung by the pandemic’s economic effects may be slashing travel budgets to compensate for years of lower revenue.
Delta Air Lines Inc. Chief Executive Ed Bastian this past week said on an investor call that the airline’s recent customer surveys forecast around 70% of pre-pandemic corporate travel will resume by 2023, including international trips.
In the near term, the travel business still faces painful adjustments. “Perhaps by the end of 2021, our assessment is that domestic business could be in the range of down 50% to 60%” from the pre-pandemic level, Southwest Airlines Co. CEO Gary Kelly said at an industry conference last month.
The job losses have already been severe. About one million travel-related jobs have been lost since February, according to the Labor Department, including more than 600,000 hotel positions and 120,000 airline and related staff. Also cut were thousands of positions in fields ranging from restaurants to aerospace manufacturing to convention-center operations.