What: Business Travel Is Still Below 2019 Levels
The results of the latest Quarterly Business Travel Tracker — a collaboration between the U.S. Travel Association, J.D. Power and Tourism Economics that launched in April — indicate that business travel is still struggling to make a comeback from COVID-19.
According to the survey, two-thirds of large-company executives expect their firm to spend less on business travel over the next six months than they did during the same period in 2019. What’s more, half of respondents’ companies are still restricting business travel in some way.
Why It Matters: Failing to Resume Business Trips Could Hurt Company Operations
Despite the low intent to invest in business trips, 46% of the executives surveyed agree that reducing company travel will have negative long-term impacts on revenue, even if the strategy saves money in the short term. And, in fact, 73% of respondents feel that business travel is essential to their company’s operations, indicating a need for these trips to come back. For that to happen in the face of increased interest rates, high inflation and other challenges, U.S. Travel is advocating for federal policies — such as a tax extenders package — that will offset these threats and allow the business travel sector to get back on track.
Fast Facts: Factors Affecting Business Travel’s Comeback
- Survey respondents included 2,545 business travelers and 195 corporate executives.
- According to the survey, 32% of business travelers and 36% of executives believe reduced business travel negatively impacts their company’s financial performance. Sixteen percent of business travelers and 30% of executives feel it hurts their ability to acquire or keep customers.
- The most cited constraints on business travel, according to executive respondents, include virtual meetings (75%), cost controls (69%) and remote work by customers (69%).
- Reasons for uncertainty about business travel over the next six months include video conference substitutes for meetings, company cost constraints and firm-set restrictions on work travel.
- U.S. Travel is predicting that business travel will accelerate in the near term, indicating that companies restricting work travel could lose a competitive advantage in the coming months.
- The tax extenders package that U.S. Travel is advocating for would temporarily restore the entertainment business expense deduction and extend the full expensing of business meals.
