Linus Benjamin Bauer, Founder and Managing Director of Bauer Aviation Advisory, and Visiting Lecturer at the City University of London
The current pandemic is revolutionising mobility, including air travel. Before the spread of Covid-19, professionals would typically travel for business, but now it has become normalised to operate from your workplace or from home via Zoom, Teams or Webex. People are starting to believe that the virtualisation of human contact will hit business travel with the expectation demand will remain low until 2025 and beyond during the post-pandemic recovery phase. I personally do not believe in the majority of the scenarios and predictions from a crystal ball as the pandemic is actually playing a role in promoting business travel.
Over the past 12 months, several major consulting firms have predicted a sharp decline in business travel in the medium- and long-term and that a large portion of business travel may never return. We somewhat agree that business travel will return at a slower pace than VFR and leisure travel, but we should not underestimate how the pandemic is promoting business travel.
Digitalisation and the virtualisation effect on business will fuel the need for business travel for three reasons.
First, in terms of their own structure, their supplier and customer relationships, companies are becoming more global. This is because the pandemic has laid the foundation for smaller and medium-sized enterprises to act globally in an easier and significantly cheaper way. Virtualisation therefore intensifies globalisation, which will lead to a surge in demand for business travel in the upcoming years when travel restrictions have been lifted underpinned by the ongoing Covid-19 vaccination rollout. All new overseas employees, customers and suppliers still have to be met and looked after.
Secondly, there is an illusion of travel benefits. Maintaining business contacts through laptop screens seems like no issue for many people nowadays particularly as ongoing travel restrictions make travel impossible for competitors. However, when travel restrictions and other measures ease, people will have to travel in order for their business to emerge stronger and remain competitive. The level of competition will intensify and quickly flourish again once restrictions become history.
And thirdly, the virtualisation of contacts may reduce the benefits of some domestic and regional trips, but it also reduces the costs of all trips. Before the virtualisation effect, the cost of travelling – in addition to transport costs and higher expenses – mainly consisted of unproductive travel time and the absence from the offices. Anyone who travelled for a single day or several nights was only available to a limited extent for daily business activities and corporate meetings.
Now, on the other hand, you can travel elsewhere and still remain largely at work in a virtual capacity. For instance, the growing ‘bleisure’ (business and leisure travel combined) segment in the travel industry, driven by younger generations, has played its part prior to the pandemic already and it will contribute to the post pandemic rebound of business travel. Thanks to virtualisation, productivity remains as high at home as it does in the office. Even the time when travelling can be much more productive because you can maintain contact with anyone, anywhere on long-haul flights or long train journeys – thanks to inflight Wi-Fi offered by various airlines across the globe. Even airports have expanded their offerings targeting business travellers.
This trend was already growing before the crisis. Many businesspeople were constantly on the phone and with laptops while traveling. In an era when remote work is becoming more common practice, travelling in many ways will almost be as efficient as working from your office. The introduction of more cabins like the Premium Economy Class on aircraft will reduce the cost of travelling – compared to the previous crises.
The enormous progress of digitalisation has allowed the valuable resource of time to be used much more efficiently when traveling. Therefore, thanks to the virtualisation of human interaction, the frequency and duration of real business trips will increase significantly in the post-pandemic era.
If you remain dubious about business travel’s resurgence, then consider the following analogy: Has the development of the telephone led to fewer or more trips? It has led to more travel activities at the end of the day. The telephone has made the globalisation of companies easier and reduced travel costs for everyone. Because when you were abroad, you could still maintain contact with your home base. In saying this, the virtualisation of the contacts will have a similar effect in the post-pandemic era.
On a side note, if remote work with all the “comfortable and environmentally friendly options” like videoconferencing continues through the end of 2021, the global carbon footprint could grow by 34.3 million tons in greenhouse gas emissions. To give a sense of the scale: This increase in emissions would require a forest twice the size of Portugal to fully sequester it all, according to a recent research conducted by MIT. Additionally, the associated water footprint would be enough to fill more than 300,000 Olympic-sized swimming pools, and the land footprint would be equal to roughly the size of a city like Los Angeles. If you want to act environmentally by just reducing the amount of business travel and replace it by technology as an alternative solution (e.g., videoconferencing), it might not always be the most environmentally friendly approach. It remains an environmental paradox.
The pandemic will promote business travel. In the medium- to long-term, people will be on the move more than ever. However, the overall effect will vary from company to company, country to country, and industry to industry. Virtualisation will soon catapult us into a new age of travel with more long-term labour mobility, tourism and migration globally. Before all this happens, let the so called Zoom fatigue kick in first before borders across the globe reopen again for all kinds of travel activities.
Linus Benjamin Bauer, Founder and Managing Director of Bauer Aviation Advisory, and Visiting Lecturer at the City University of London.
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How the pandemic can promote business travel
Digitalisation and the virtualisation effect on business will fuel the need for business travel for three reasons
Linus Benjamin Bauer, Founder and Managing Director of Bauer Aviation Advisory, and Visiting Lecturer at the City University of London
The current pandemic is revolutionising mobility, including air travel. Before the spread of Covid-19, professionals would typically travel for business, but now it has become normalised to operate from your workplace or from home via Zoom, Teams or Webex. People are starting to believe that the virtualisation of human contact will hit business travel with the expectation demand will remain low until 2025 and beyond during the post-pandemic recovery phase. I personally do not believe in the majority of the scenarios and predictions from a crystal ball as the pandemic is actually playing a role in promoting business travel.
Over the past 12 months, several major consulting firms have predicted a sharp decline in business travel in the medium- and long-term and that a large portion of business travel may never return. We somewhat agree that business travel will return at a slower pace than VFR and leisure travel, but we should not underestimate how the pandemic is promoting business travel.
Digitalisation and the virtualisation effect on business will fuel the need for business travel for three reasons.
First, in terms of their own structure, their supplier and customer relationships, companies are becoming more global. This is because the pandemic has laid the foundation for smaller and medium-sized enterprises to act globally in an easier and significantly cheaper way. Virtualisation therefore intensifies globalisation, which will lead to a surge in demand for business travel in the upcoming years when travel restrictions have been lifted underpinned by the ongoing Covid-19 vaccination rollout. All new overseas employees, customers and suppliers still have to be met and looked after.
Secondly, there is an illusion of travel benefits. Maintaining business contacts through laptop screens seems like no issue for many people nowadays particularly as ongoing travel restrictions make travel impossible for competitors. However, when travel restrictions and other measures ease, people will have to travel in order for their business to emerge stronger and remain competitive. The level of competition will intensify and quickly flourish again once restrictions become history.
And thirdly, the virtualisation of contacts may reduce the benefits of some domestic and regional trips, but it also reduces the costs of all trips. Before the virtualisation effect, the cost of travelling – in addition to transport costs and higher expenses – mainly consisted of unproductive travel time and the absence from the offices. Anyone who travelled for a single day or several nights was only available to a limited extent for daily business activities and corporate meetings.
Now, on the other hand, you can travel elsewhere and still remain largely at work in a virtual capacity. For instance, the growing ‘bleisure’ (business and leisure travel combined) segment in the travel industry, driven by younger generations, has played its part prior to the pandemic already and it will contribute to the post pandemic rebound of business travel. Thanks to virtualisation, productivity remains as high at home as it does in the office. Even the time when travelling can be much more productive because you can maintain contact with anyone, anywhere on long-haul flights or long train journeys – thanks to inflight Wi-Fi offered by various airlines across the globe. Even airports have expanded their offerings targeting business travellers.
This trend was already growing before the crisis. Many businesspeople were constantly on the phone and with laptops while traveling. In an era when remote work is becoming more common practice, travelling in many ways will almost be as efficient as working from your office. The introduction of more cabins like the Premium Economy Class on aircraft will reduce the cost of travelling – compared to the previous crises.
The enormous progress of digitalisation has allowed the valuable resource of time to be used much more efficiently when traveling. Therefore, thanks to the virtualisation of human interaction, the frequency and duration of real business trips will increase significantly in the post-pandemic era.
If you remain dubious about business travel’s resurgence, then consider the following analogy: Has the development of the telephone led to fewer or more trips? It has led to more travel activities at the end of the day. The telephone has made the globalisation of companies easier and reduced travel costs for everyone. Because when you were abroad, you could still maintain contact with your home base. In saying this, the virtualisation of the contacts will have a similar effect in the post-pandemic era.
On a side note, if remote work with all the “comfortable and environmentally friendly options” like videoconferencing continues through the end of 2021, the global carbon footprint could grow by 34.3 million tons in greenhouse gas emissions. To give a sense of the scale: This increase in emissions would require a forest twice the size of Portugal to fully sequester it all, according to a recent research conducted by MIT. Additionally, the associated water footprint would be enough to fill more than 300,000 Olympic-sized swimming pools, and the land footprint would be equal to roughly the size of a city like Los Angeles. If you want to act environmentally by just reducing the amount of business travel and replace it by technology as an alternative solution (e.g., videoconferencing), it might not always be the most environmentally friendly approach. It remains an environmental paradox.
The pandemic will promote business travel. In the medium- to long-term, people will be on the move more than ever. However, the overall effect will vary from company to company, country to country, and industry to industry. Virtualisation will soon catapult us into a new age of travel with more long-term labour mobility, tourism and migration globally. Before all this happens, let the so called Zoom fatigue kick in first before borders across the globe reopen again for all kinds of travel activities.
Linus Benjamin Bauer, Founder and Managing Director of Bauer Aviation Advisory, and Visiting Lecturer at the City University of London.
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