With flexible work arrangements, employers anticipate more trips to company headquarters
Corporate travel is expected to slowly rise this year compared with 2021, according to a report from Deloitte.
U.S. companies expect travel spend to be 25 per cent of 2019 levels in the first quarter of 2022, and 36 per cent by the second quarter of the year. This is projected to rise to 45 per cent and 55 per cent the last two quarters of the year.
But it would take at least two years for travel spend to reach pre-pandemic levels, as travel spend’s growth is expected to slow in 2023:
- 59 per cent of 2019 levels in Q1 2023
- 63 per cent of 2019 levels in Q2 2023
- 66 per cent of 2019 levels in Q3 2023
- 68 per cent of 2019 levels in Q4 2023
"Business travel seemed to be ready for takeoff last summer, but the emergence of COVID-19 variants quickly grounded plans — as a result, leaders are more conservative in their estimates for business travel's recovery,” says Mike Daher, vice chair at Deloitte and U.S. transportation, hospitality and services non-attest leader.
Travel spend was eight per cent of 2019 levels in Q2 2021, 13 per cent the following quarter and 20 per cent by the last three months of 2021, according to Deloitte.
Government restrictions hampered a major return to business travel in 2021, according to a previous report.
Workplace flexibility
Workplace flexibility is also affecting business travel, according to Deloitte, as travel managers expect the future work from home rate to be 2.5 times higher than before the pandemic.
For companies that are work-from-home dominant (where the average employee comes to the office zero to two days per week) in Q2 of 2022, 36 per cent expect their corporate travel spend to recover to pre-pandemic levels by the end of 2023.
Conversely, 71 per cent of office-dominant (where the average employee comes to the office at least three days per week) companies say their travel spend will recover by the end of 2023.
However, as a result of flexible work arrangements, one in four respondents expect more trips to company headquarters, despite less frequent travel overall, found the survey of 150 U.S.-based executives with travel budget oversight, conducted in February.
“While many of us are eager to see our co-workers, clients and associates in person, technology platforms have made it possible for most businesses to not just continue their operations from afar, but thrive in doing so,” says Daher.
“Combined with workplace flexibility that shows no signs of going away, businesses are reassessing and reprioritizing when and why employees travel — which can create a suitcase full of new opportunities for organizations to evolve and grow."
Nearly one out of four Canadians considered working from abroad while keeping the same job, and 39 per cent say they would keep their current job but live in another province or country if their employer lets them do it, according to another report.
