Industry Insights

Will travel take off in 2021?

  • Multi Asset
  • Consumer
  • North America

It looks like travel will be in recovery for the long haul. Boston Consulting Group estimates that it could take until 2024 for tourism to reach 2019 levels. In the meantime, segments within this industry have recorded devastating losses over the past year – for instance, globally, airlines lost USD 370bn, with air passenger traffic down from 4.5 billion to 1.8 billion. Among pockets of optimism spurred by vaccination programmes, there are fears over new mutations and reinstated travel restrictions. In the face of this uncertainty, our Interviews have looked at the prospects of various facets of the travel industry this year.

As we heard in one Interview from an interim executive at the Global Business Travel Association, business travel tanked by almost 70%, going from USD 1.43tn to USD 738bn during April 2020 to year-end. There have been varying opinions on how much of this could be permanently lost, in part owing to technologies such as Zoom demonstrating that not all meetings need to take place in-person. However, this specialist is optimistic, emphasising that history is the best indicator of future behaviour. “There certainly is going to be a ramp-up period… we’ve got to wait until we see borders open up and quarantines get standardised or eliminated because of the vaccines and the testing, the fact is business travel will come back, I think, in its entirety, just like it did after 9/11, just like it did after some regional pandemics like Sars, and even after the great recession.” 

While remote collaboration technology will still be used in a complementary fashion, they believe there will be a “roaring economy” post-pandemic, spurring in-person meetings. Delta’s CEO, Ed Bastian, is optimistic, with a survey of their corporate customers revealing the 40% would return by 2022 – the company also forecasts that 51% of its corporate customers will be back by end-2023. On this, our specialist countered: “I would say that I think his number is not necessarily incorrect at all. It’s his gauge based on what he’s seen and the conversations he or his sales team are having with their corporate clients. I think it’ll take a little longer to see maybe that high a number… 2022 is pretty quick, but that is very possible.” Instead, the specialist posits 2025 as the date for pre-COVID business travel to return.

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