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Will the COVID-19 outbreak contribute to a more sustainable business travel model?

The COVID-19 pandemic has had a huge impact on all kind of travelling. The impact will be visible for years.

Published : 12.04.2021

During the pandemic international leisure travel has been almost non-existing both due to closed borders and the risks related to travelling safely. Many experts foresee that leisure travel will never be back to what it was before the pandemic. Travelers will instead value a more sustainable tourism in which safety and security issues are considered throughout the trip.

The future of business travel is more difficult to predict, as multinational companies and global supply chains will always require some traveling to get operations to run smoothly.

A recent master thesis at Haaga-Helia (Rojo 2020) aimed at studying the relationship between business travel, sustainability and the COVID-19 pandemic. The key challenge related to business travel in the years to come will be, how organizations can guarantee the safety of employees who have to travel as COVID-19 most likely will have local outbreaks for many years to come.

Defining business travel

Business travel can be defined as travelling for work to places that are outside the normal commuting area. The employer and not the traveler him/herself pays for the expenses related to the travelling. Typical motives for business travel are meeting existing and potential business partners, conferences and fairs but also incentive travel belong here.

Marin-Pantelescu (2011) argues that business travel is more resilient than leisure travel i.e. being much less affected than leisure tourism by crises such as economic downturns, natural disasters and pandemics. The global COVID-19 outbreak has though had a huge impact also on business travel compared to earlier crises as many countries more or less have closed their borders for international travel.

Business travel during the pandemic

Almost all international travel dropped quickly in March 2020 when it became clear that the COVID-19 will develop into a global pandemic. Limited travel for business has been possible to most countries throughout the pandemic but to most part issues that used to require business travel has now been discussed and solved by online meetings. Thus, challenging times like doing business during a pandemic can contribute to new solutions and practices.

The decrease of business travel has triggered significant cost savings in the same time as less traveling has decreased the environmental footprint of tourism. From a social perspective, replacing business travel with virtual channels improves also employee well-being and work-life balance as work requires less mobility.

There are also negative aspects with the lack of travelling. Many projects and new partnerships are not proceeding without the possibility to meet face-to-face. This can cause a lot of stress for the people involved, even if a year without business travel can be a relief for many.

The time after COVID-19

The interviews conducted for the study by Rojo (2020) clarify that from a Finnish perspective business travel will most likely never return to the level it was before the pandemic. According to a report by McKinsey (2020) business travel related to sales and customer management is the part of business travel recovering first when the pandemic is over. Travel for seminars, conferences and fairs will return at a slower phase and online meetings might permanently replace internal meetings between units of the same organization.

The recovery of international business travel will though most likely be slower than the recovery of leisure travel. This because companies and organizations sending their employees overseas are also responsible for the safety of these employees. Travel related risks must be analyzed thoroughly at managerial level before business travel intensifies.

One key challenge for organizations will be how to manage health and safety issues once business travel starts. A fact for sure is that there is a latent demand for business travel, even if many issues can be solved by online meetings.

Business is based on relationships characterized by trust and building trust without meeting face to face is difficult. In business, trust is created not only during formal meetings but also during lunches, dinners and informal meetings.

Final reflection

The discussion about online meetings replacing a part of the traditional business travel is not new. Arnfalk and Kogg (2003) discussed already twenty years back how companies could manage the transformation to online meetings to make their business more sustainable and save money.

Many factors indicate a more sustainable business travel in the future. Most likely there will never be a return to the amount business travel seen before the pandemic. A hybrid work model will be the new normal. Organizations have now time to consider and develop smarter and more sustainable travel policies and based on recently gained knowledge. In the same time there is a need to focus on preventive risk management to be able to prepare better for an unpredictable future.


Authors:
Pia Rojo, Business Education Teacher at Helsinki Business College
Eva Holmberg, Haaga-Helia UAS

References:

  • Arnfalk, A. & B. Kogg (2003). Service transformation—managing a shift from business travel to virtual meetings. Journal of Cleaner Production, 859-872.
  • Marin-Pantelescu, A. (2011). The business travellers’ motivation and behavior. Cactus Tourism Journal. Vol. 2, 72-79.
  • Rojo, P. (2020). COVID-19 and business travel – a sustainability approach. Master thesis, Haaga-Helia UAS.