Factors such as ‘zoom fatigue’ and the rise of the digital nomad will eventually bring this sector to a full recovery. However, business travel may not be as lucrative as before.
Remote working will be the new norm
The Covid-19 pandemic has led to many employees working from home, and has demonstrated how jobs can be carried out effectively, out of the office. Recent survey results show that working remotely will be the norm in future, with appetites to return back to the office staying low. According to a Verdict Community Survey, 28% of respondents said they wish to work from home permanently, with 45% opting for a hybrid office and home situation.
This trend of remote working has encouraged companies to widen the search for new recruits, without being limited to location. This step allows for more talent and skills to be acquired, along with lower overhead costs, benefitting the company in the long-run. When nationwide restrictions ease, there will be an opportunity for these new recruits, spread across the country, to travel to the office as an opportunity to ‘check-in’ and meet fellow colleagues. This kind of business travel will not have the same economic impact for destinations and tourism companies.
Business travel was traditionally high-cost, as the business is paying for it, the employee will not hold back in choosing a first-class ticket or Uber Exec. These short-term stays, likely to be a day-trip, will wipe out the possible gain from city centre hotels for example, which depend upon high-spending business travellers.
Business travel-dependent tourism companies may also suffer financially from the lack of executive meetings, that are now being held over video conferencing platforms. Traveling internationally for executive client lunches, extravagant parties and ways to impress the client have completely changed. Whilst these conferencing platforms can in no way replace human contact, the number of these client events held will reduce due to Covid-19. A lack of budget, alongside a lack of appetite to travel, will fuel this decline.
The rise of the ‘digital nomad’ will kick-start some cost-effective business travel
The new ways of remote working have resulted in an increase in the number of ‘digital nomads’, employees who work outside of the country their office is based in, usually in a desirable destination. As more corporations have incorporated flexible remote working policies into contracts, digital nomads have seen the Covid-19 pandemic as an opportunity to ‘get away’. Spotify, a popular music streaming service based in Sweden, recently revealed that all employees can now ‘work from anywhere’, including abroad. Other companies will start to offer this perk as a benefit of employment to stay competitive.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataHowever, the benefit to business-travel-related companies and destinations will only be if these ‘digital-nomads’ are high earners, and subsequently high spenders. As the demand for medium to long-term lodging rentals will increase in ‘nomad’ destinations such as Lisbon, Buenos Aries and Cape Town, this may limit profitable stays by tourists who are likely to pay a higher nightly rate. Nevertheless, these digital nomads will guarantee an income for these properties, which is something that is highly desired due to the impact of Covid-19. Some countries, such as Iceland, have placed restrictions on ‘digital nomad’ visas. Visitors must earn at least $88,000, which is in place to ensure financial benefit, rather than burden to the destination.
