Johnny Thorsen considers work and life with less travel
This is not the end of
a Hollywood blockbuster or a great new advert. It is the end of corporate
travel as we have come to know and love it for more than 20 years. I am a strong
supporter of the travel industry and personally ready to travel almost
anywhere, but I cannot see how our beloved (and sometimes hated) industry can
bounce back without some dramatic changes happening in a very short time period.
This article outlines some of my areas of concern and, more importantly, some
areas of big opportunities as we start looking at 2021.
"Wow! You are so
lucky you get to travel"
I still remember that
sentence being spoken by several of my best friends back in Denmark in the
early nineties when they heard I was going to cool places like Nice (Amadeus
development headquarters), London (Sabre EMEA headquarters), San Francisco
(birthplace of the online travel industry) and of course Barcelona, Miami,
Marrakech, Chicago and Vienna for various industry events.
Back then, it truly
felt like you were one of the chosen ones if you had a paying job that included
real business travel. In many ways we have been pushed back to a similar
environment by Covid-19, as it is no longer a given that everyone can – or is willing
to – travel on a weekly or monthly basis.
What will prevent a
full bounce-back?
Let us start with the
obvious one – talent, or perhaps lack thereof. Virtually all major travel
industry players have started a dramatic downsizing effort or will be doing so
very soon. The first people to leave, typically, are the ones most likely to
get a new job elsewhere because they have high talent and skill levels. This
means we are likely to see an exodus of quality people within the digital
innovation area, as they typically are quite expensive, non-revenue-driving
individuals who create new systems and services but rarely deliver new business
or service to actual customers. This mass exit will lead to a lower level of
innovation, which will result in a slower recovery from the crisis. Travel needs
smart, intelligent and open systems to manage the new service delivery
framework.
Secondly, we need well-operated
and financially strong airlines to deliver a global operating backbone. Despite
an extended period of sustained growth and profit, the reality is that most
airlines will run out of cash within three months. They will get various levels
of funding from governments to survive for another three to six months, but
once they start operating independently with a much smaller business volume,
they will be forced to reduce schedules and capacity and also reduce their
investments in technology and service innovation. This typically leads to the
third problem, which is higher airfares.
Imagine if the average
cost of flying one hour goes up by 50 per cent and remains at that level for
the next three years. That will have an immediate negative impact on global
travel, as half or more of all flights in 2019 represented a low-cost service,
delivering an endless stream of business and leisure passengers to almost any
destination in the world. Despite the current fall in oil prices and subsequent
lower cost of aviation fuel, the lack of actual flight capacity (perhaps also
empty middle seats) will probably lead to higher prices.
The next item to think
about is the sustainability angle. While overall CO2 emissions obviously will
be much lower in 2020 than 2019, the measurement of emission per passenger
kilometer flown will probably go up as flights might be less full (again,
potential for empty middle seats). Furthermore, airlines will delay upgrading
the actual aircraft from the old fuel-eating engines to a newer fuel-efficient
version due to the low cost of aviation fuel. That said, we will likely see an
overall reduction in flight activity per traveller on average, and we all have
seen or heard about the rapid improvements Mother Nature has experienced as a
result of the slowdown in overall pollution levels. For some, including me, this
will lead to personal choices regarding lower levels of travel.
And finally, if all
the above items are resolved in a meaningful and positive way, we still need
governments to agree on transparent, easy-to-explain and reliable rules for how
travellers from other countries will be treated if there is suddenly a change
in their medical status. Covid-19 could mutate, and we will likely see new
outbreaks and new quarantine rules introduced overnight. How will all the
countries in the world address this in a trustworthy and easy-to-communicate
model, regardless of where you are from and have gone to? No corporate travel
programme will overcome medical realities and the geopolitical obstacles that
follow.
Managed travel: What
now?
Travel managers should
get ready for a few years of limited travel where the local destinations inside
their country of residence probably will become the new top ten frequent
destination list. They should also prepare for a virtual travel experience
nirvana with new ways of going to your old favourite locations. Providers of
these new services are not visible today, but based on my own findings and
conversations the past few weeks, I look forward to hearing about how these new
startups will deliver technology and services we need to restart travel at a
minimum level in 2020 and then hopefully get to 50 per cent of 2019 volumes by
end of 2021.
If you are a global
travel manager, you should start preparing for how your position will evolve
inside the company you work for. The travel programme is no longer about
getting the best price, but rather about enabling the right people to travel under
a "safe-way protocol" when a trip cannot be avoided – quite a change
from the old world.
It will quickly become
clear that you need to change the allocation of your time to reflect this new
environment. Perhaps you should remove the hotel RFP from your to-do list and
focus on more important items like safe-travel protocol, travel profiles for
medically fragile employees, new reason codes for physical travel in general and,
of course, the introduction of a green travel policy, just to give you a few
ideas. Perhaps also take a close look at what technology components you will
need in order to deliver and manage the new service framework.
It might also be worth
looking at how your travel technology stack is compiled. How many of the
services you use today are provided by your TMC, and how many provided by
independent travel tech providers? Will they all survive the Covid-19 crisis,
or should you prepare for a sudden change of the tech infrastructure? You may need
a new range of services to support the future travel programme. Look at who can
provide these in the most reliable and efficient way and decide if your company
is prepared to invest the time and energy required to engage with the companies
that can deliver what you need. This is likely to include startups that will
deliver new services you once didn't need.
Travel is not gone. It
will come back. If we look five years into the future, we are hopefully
somewhere between 75 per cent and 100 per cent of 2019 corporate travel volumes,
according to many experts. However, we could also be hovering around the 50 per
cent mark. Would this be negative? It might mean we have succeeded migrating
our corporate behaviour from a "must meet in person" mentality to a
"let's only meet in person as a last option" one, with massive
savings on the travel budget as well significant reductions of carbon emissions.
Both are likely to make a positive impact on the profitability of the business
and especially on the environmental front.
I believe I will
travel less in the future, both for corporate and leisure travel purposes. We may
perhaps again feel privileged and lucky every time we go to the airport to
board a plane. Many of my friends – both in business and personal life – are
sharing that view. So perhaps we should stop focusing on whether travel will
bounce back to the old levels or not, and rather focus on how travel will
deliver value and benefits in the future.
This article represents Johnny Thorsen's personal views and not those of his employer.