How is it possible that business travel is not the same again?

BERLIN / MILAN, September 9 (Reuters) – Sylvia Burbery is delighted that she no longer spends most of her life traveling for work.

“I am grateful that the pandemic has forced us to take a step back and look at the ways of working we took for granted,” said Mars Petcare brand regional president of emerging markets Royal Canin.

“I’m very happy not to spend 80% of my time traveling again. I’m not even sure it will be 50%,” Burbery said from his office in Paris.

Burbery’s feelings are echoed by workers around the world who are tired of the hassle of corporate travel. This is bad news for airlines, hotels and conference centers that rely on this lucrative business.

Mars, the family-owned pet snack and food company, said cost, environmental and health considerations were behind its decision to keep travel at less than half of pre-pandemic levels, which means 145,000 fewer flights a year.

Nici Bush, Mars ’vice president of Mars for Workplace Transformation, said reducing travel could also make jobs for seniors more attractive to people with families.

He said 700 staff members could attend strategy events or online sales compared to the 100 people who used to gather in person: “You can really be more surgical when you travel.”

Niklas Andreen, chief operating officer of global corporate travel management firm CWT, knows the outlook is reduced for a quick return to pre-pandemic levels for the business travel industry.

While 58% of people surveyed by CWT say they are willing to take back deposits paid for expenses, bookings are only gradually recovering, with 80% of domestic travel now, compared to 67% of pre- -pandemic in 2019.

“It will be a few years before he returns,” Andreen said.

In one of the first tests of the business community’s fondness for global meetings, the German Motor Show in Munich this week has seen as many major car companies as Toyota (7203.T) and Jaguar’s Land Rover they have chosen to stay away. Read more

The German airline Lufthansa (LHAG.DE), however, has seen demand for its regional flights between Germany, Austria, Switzerland and Belgium increase by 15% in recent weeks and have increased by 30% for flights. in Germany, said chief executive Carsten Spohr.

Lufthansa will make more flights for business travelers in September, but only expects a 90% return on long-term pre-pandemic travel.

COUNTING THE COST

Prior to the pandemic, airlines made the most of their profits from business travel, as companies are more likely to make reservations at short notice and are willing to pay more for the convenient times.

According to a Deloitte survey of 150 travel managers, US spending on corporate travel is expected to only reach 25% –35% of 2019 levels in the fourth quarter of 2021 and 65% –80% a year later .

“As companies wait, think about how to maintain some of the cost savings they’ve achieved,” said Anthony Jackson, head of Deloitte’s U.S. aviation practice.

The chief executive of Italian fashion group Prada (1913.HK), Patrizio Bertelli, said he believes business travel will be “minimized”.

“This is definitely a big advantage for the margins,” he said earlier this year.

GREEN JOURNEY

Companies are also looking for ways to reduce their carbon footprint: about half of respondents to the Deloitte survey said they plan to adjust their business travel policy to lessen its environmental impact next year.

“I used to fly from Dallas to New York during the day for an internal meeting with three or four people. I don’t see that coming back very quickly,” Jackson said.

As part of the climate measures presented this week by Zurich Insurance Group (ZURN.S), it said it would reduce air travel compared to its pre-pandemic level by 70% from 2022. read more

The CWT advisory group is helping companies design travel policies that balance costs with environmental impact, for example, by proposing a lower-cost direct flight instead of a cheaper, more carbon-indirect indirect flight.

CUSTOMER SERVICE

However, CWT’s Andreen said it was still important for some executives to reunite staff and clients.

“It’s hard to close a deal without looking into each other’s eyes,” he said.

And Burbery said some face-to-face meetings are still better for brainstorming and resolving tensions between staff: “When you’re virtual, you only see what people want you to see.”

According to the Deloitte survey, meeting with customers is the main reason for resuming travel, while internal meetings and training are kept online.

Filippo Baldazzi, CEO of silk manufacturer Serica 1870, who works with Brunello Cucinelli, Kering and LVMH, sends fabric samples to customers he can’t visit in person.

“I hate video calls and customers like Vuitton and Gucci want to be pampered, expect some kind of treatment with white gloves,” he said.

Additional reports by Ilona Wissenbach in Frankfurt, Michael Shields in Zurich, Claudia Cristoferi in Milan; Edited by Elaine Hardcastle

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