International business travel is undergoing significant change with the pressures of COVID-19, the green agenda and cost playing a role in limiting it. But for how long?
Already under pressure over environmental concerns, the additional costs likely to be imposed by airlines once the threat from coronavirus dissipates, may mean that jetting to Los Angeles to check in with a client, or to recruit a lawyer, is somewhat more difficult to justify.
Airlines need to recoup the millions of pounds lost, will be practising social distancing on board aircraft and reducing the number of flights. Couple this with the fact that online meetings have become second nature to such an extent that the whole idea of jetting off could soon be viewed as somewhat eccentric, particularly when the wasted hours of travelling to the airport and sitting around in departure lounges are factored in.
International business travel specialist Richard Kerr writes on his Points Guy website: “With nearly zero travel expenses over the course of these months, the savings will likely not go unnoticed. In a time when many businesses will be looking for cost savings, they may consider the work that was accomplished remotely during quarantine and decide to cut back on travel expenses permanently.
He adds: “Meetings that previously ‘required’ an in-person presence will continue to be remote.
“There will be a stigma around large gatherings like conferences and all-employee meetings for an indeterminate amount of time.”
Kerr warns that some airlines, such as United, are already planning for a permanent fall in demand and looking at how they can downsize in the post-pandemic era. In short, airlines won’t be able to do “normal” again for some time.
International law firms are among businesses facing this altered landscape. Pinsent Masons’ chief operating officer Alastair Mitchell reflects on how much has changed. He tells People in Law: “Based on 2019 spend, PM’s International (as opposed to domestic) travel accounted for 12% of journeys globally and 54 % of our overall travel spend. Our non-client chargeable travel usually sits around 75% of the total travel cost.
“This will include inter-office meetings; conference attendance; business development. PM is heavy on domestic and European travel because of the large number of offices.”
He says the firm’s investment in technology has been a great success as an alternative to travelling especially with the roll out of Microsoft Teams, and indicates that it wants to go further: “We are working on continuous improvement to our technology to provide an effective and efficient way of home working.”
Prior to the outbreak of COVID-19, business travel at the firm was actually on the increase, says Mitchell, “although we were trialling initiatives such as no travel weeks to try and raise awareness and reduce the amount of travel and hence our carbon footprint”.
However, he says, there will always be a need for physical meetings.
“Meeting our clients and colleagues face to face will never be completely replaced by technology. Face-to-face meetings are still very important to the business in terms of relationship building as not everything can be done effectively remotely. Stronger long-lasting relationships will only be formed with face-to-face interactions.”
“We do of course need to think about our carbon footprint so there needs to be a considered balance between technology and travel.” This requirement means that travel will resume, but only when it is safe to do so, says Mitchell. “We have the right travel suppliers on board who have implemented enhancements to their service offering.
“Our operations teams have been trained in relation to Covid protocols – where to look for up-to-date and reliable information to make sensible risk assessments. International SOS, our medical and security provider, has enhanced its service offering with a pandemic site that provides up-to-date screening and quarantine advice which is available on our portal. It has brought in additional resources focused solely on Schengen countries as these are the ones that are subject to the most frequent changes.”
Health and wellbeing
Stronger relationships have been built up with travel suppliers, says Mitchell, alongside a more rigorous booking process with additional checks in place to ensure it is safe to visit a particular destination. This helps cut through the confusion of different regulations to bring clarity to a messy picture. Similarly, a stringent approval process is now in place for any proposed business travel.
Mitchell says: “Our business travel and our travel programmes are more focused around traveller health, wellbeing, pre-trip assessments together with the actual business case around the need to travel. “While we are currently travelling very little we are preparing and positioning ourselves to have a more efficient and safe experience for the traveller moving forward and carrying on with our continuous improvement programme for travel and travel risk.”
Post-trip traveller feedback surveys have also been introduced by Pinsents, which provide useful information and ensure business travellers feel safe whilst travelling. One of the side effects that hasn’t escaped Mitchell’s notice is that because of the decline of travel undertaken by the business, “we have seen a reduction in our carbon CO2 emissions of 97%. Obviously we cannot claim credit for this through any change in policy.”
Tom Wilkinson, CEO, AXA Global Healthcare, believes the pandemic will have a long-term impact. He says: “There’s no doubt in my mind that Covid-19 will have a long-term effect on attitudes towards business travel. In addition to government restrictions that may remain in some territories for some time to come, I think there will also be a certain amount of hesitation to visit other countries, until people are confident they are able to freely travel without feeling vulnerable to this disease.
“Fortunately, the current pandemic has brought about huge advancements in the ‘virtual’ ways we work. The adoption of communication technologies, and willingness to adapt, has accelerated in a very short space of time – and so far, it’s proving to be a very good alternative to face-to-face meetings in many roles and will perhaps lead to fewer trips for business travel – which would also have a continued positive impact on the environment.”
Wilkinson’s comments have added resonance when placed in the context of senior business people becoming ever more concerned about the effects of international travel on the environment.
Will Richardson, founder of green business auditor Green Element, explains how one senior executive asked for some very specific advice on travel: “He told me, ‘My company has made a lot of acquisitions globally and I get asked to go to short meetings all around the world – but I don’t want to go from an environmental point of view. I know their employees want to meet me but how do I make them understand that I don’t want to travel to meet them?’.”
But others feel things will return to “normal” in time although the trend away from business travel was already established before the pandemic. Michael Skapinker, journalist and executive editor of the FT-IE Corporate Learning Alliance writes in the Financial Times about how we saw similar conversations about travel’s decline after both Gulf Wars and 9/11.
He says: “Every economic slowdown produces the same statements. They have partly proved true. While worldwide airline passenger numbers levelled out during these crises before taking off again, figures from the UK Office for National Statistics and Airlines of America show that business travel has been in decline for decades.”
He tells the FT that unless you are physically in a room with someone “you can’t sense the change in breathing and eye contact when people are more or less interested. You aren’t sure where the laughs come from, or why. Second, while companies grumble about the expense of stands at trade shows, they are an effective way of meeting crowds of potential customers. For smaller companies especially, trade shows save having to make dozens of separate trips.”
Many office-based employees will have heard the refrain “it keeps me out of the office” and felt a judder of jealousy when hearing of a colleague’s glamorous-sounding trip to Hong Kong, Sydney or Seattle. But this outlet from the office or work-at-home routine seems set to be grounded for months to come.