If you’re a former jet-setter who hasn’t been on a business trip in years, hang in there. Business travel plummeted in 2020 and 2021, and it still hasn’t returned.
According to an April report by the American Hotel & Lodging Association, or AHLA, conducted with the hotel analytics group Kalibri Labs, business travel revenue in hotels in the United States for 2022 is expected to be 23 % at pre-pandemic levels.
And it’s not just hotel revenues that are down. A study by the US Travel Association, a nonprofit organization representing the travel industry, estimates that overall business travel spending will decline 24% in 2022 from 2019 levels.
Some cities have been hit harder than others. The AHLA has released business travel revenue projections for 2022, and four major U.S. cities — San Francisco, New York, Washington, DC and San Jose, Calif. — are expected to see revenue declines of more than 50%. compared to 2019. San Francisco is particularly hard hit, with a drop of nearly 70% in revenue.
When will business trips return?
The US Travel Association estimates that domestic business travel won’t return to 2019 levels until 2024, and it’s expected to reach just 76% of 2019 levels this year. International business travel could take even longer to recover (until 2025) and is only expected to reach 72% of its pre-pandemic levels in 2022, according to the organization’s forecast.
For what it’s worth, there’s more business travel than there was in 2020 or 2021. And the business travel landscape in 2022 is markedly different than in pre-pandemic years. There are fewer people attending conferences and face-to-face meetings with clients these days. But there is an increase in other types of business travel.
Team travel, where multiple employees from the same team meet for an event or offsite event, increased by more than 900% between January and May 2022, according to corporate travel agency TripActions.
Data from TripActions also shows that the number of travelers per company has increased. Whereas before, only a few employees constantly traveled to sales meetings and conferences, today more employees travel at least once for work. A spokesperson for TripActions told NerdWallet that while in 2019 engineers made up 9% of bookings, today they make up 13%. Meanwhile, sellers previously made up 51% of bookings, but now only make up 45%.
Data from TripActions also shows that the number of team bookings made was 7% higher in April 2022 than its pre-pandemic peak in 2019.
Changes in Business Travel: Good or Bad for Leisure Travelers?
The decline in business travel (and its slow return) comes with pros and cons for leisure travelers.
Disadvantage: fewer opportunities to accumulate loyalty points and status
For some, personal travel is funded in whole or in part by points earned through business travel.
Business travel can also generate opportunities to gain elite levels of status that a person would otherwise be unlikely to achieve through leisure travel alone.
Spend five nights a month in a hotel for a consulting gig, and that’s enough to win Hyatt’s prominent globalist status. that, in turn, corresponds to MGM Rewards Gold statusunlocking valuable perks in the casino-centric hotel chain, like waiving resort fees, which could save you hundreds of dollars on your Las Vegas vacation.
How to use it to your advantage: You might not be able to rack up as many points and miles through work, but many brands have made it easier to earn or maintain status. Take a closer look at the loyalty programs you belong to, because you could be much closer to achieving elite status than you thought. If you only have one or two nights left or flights running out of status, paying for a mattress may still be worth it.
Pros: Less competition with business travelers for availability
For Tim Leffel, editor of online travel magazine Perceptive Travel, the lack of competition for seats from business travelers has opened up more opportunities for deals.
“As a leisure traveler, I have been very pleased to see that business travel is slow to return, as it means more opportunities to purchase business class seats at a good price,” says- he. “During the pandemic, I ended up buying several business class tickets between Mexico and the United States”
Meanwhile, airlines usually offer seniority-based upgrades to elite status. While a frequent business traveler may have an ultra-high elite status, a leisure traveler with a low level of elite status might ultimately get that upgrade to first class.
How to use it to your advantage: Consider credit cards that offer automatic elite status. While this isn’t necessarily the highest tier, you’re probably not competing with as many business travelers as usual. (And business travelers are more likely than leisure travelers to have elite status.) With fewer business travelers, you’re more likely to get an upgrade to elite status than in previous years.
Con: Lack of business travel could be the reason prices are so high
Some indicators suggest that it is business travel that makes leisure travel cheaper, in part because more business travel means more route availability overall. For leisure travelers, greater route availability means less need to stop for a layover or fly at undesirable times. Business flights also tend to generate more revenue for airlines, as these fares tend to be booked at the last minute, include more flexible cancellation policies, or belong to a higher class of service (or combination of the three).
How to use it to your advantage: Head to destinations that typically rely on business travel. Although San Francisco is still expensive, it could be cheaper in 2022 compared to 2019 given the drop in business travel demand.
The bottom line
Business travel is slowly coming back, but it is far from fully back. The return of business travel could likely take years. And when it does, it probably won’t look like it did before the pandemic.
Expect more company-sponsored trips to meet teammates. In the meantime, you might expect to attend fewer conferences or sales meetings. If you’re a former road warrior, you might find yourself traveling less than before the pandemic. But if you’ve never traveled on behalf of your company before, that might change, especially if you now have teammates spread across the country.