Business is intrinsically linked with travel, as it demands building relationships, trust and local knowledge. History is littered with examples of business being spurred by travel and summits, from the Venetian merchant Marco Polo in the late 1200’s building business between East and west, to grand festivals like the Field of Cloth and Gold in 1520 and the Great Exhibition at the Crystal Palace in 1851, both being designed to improve commercial relationships and ultimately spur economic growth.
The pandemic, climate consciousness and the accelerating adoption of digital video platforms have made business travel a contested issue. Over the last year, business travel has been all but impossible, forcing executives to take calls from their living rooms and chair meetings hunched over their kitchen tables. This being said, even before the pandemic there was growing pressure for companies to reduce their carbon footprint and bolster their ESG credentials. When calculating a corporation’s environmental impact, flying executives from New York to London for a working dinner at the Ritz seems like low hanging fruit. On the other hand, after a year and a half of attending digital forums and spending 12 hours a day staring into a backdrop of flickering blue light, it isn’t surprising that companies are analysing the benefits of business travel once again.
In 2019, business travel accounted for 25% of all domestic and international travel, equal to US$1.3trn (The Economist, 2021). Given travel has been firmly frozen since 2020, forcing total global travel to collapse and planes being grounded in airports. This has prompted many voices to question the purpose of such excessive (and expensive) travel, especially when we have been witnessing most business meetings pivoting to digital platforms throughout the pandemic. The arguments against flying out armies of well dressed, high-income executives to bump shoulders with peers will only grow louder as companies fulfil their environmental commitments. For instance, Microsoft has confirmed its ambitious roadmap to being carbon negative, including calculating the indirect inputs like business travel and a full assessment of their supply chain. This was addressed by Brad Smith (president of Microsoft) in 2020, stating that of the ‘16 million metric tons’ of carbon produced annually by Microsoft, ‘12 million metric tonnes’ of it can be calculated as indirect or supply chain emissions (such as business travel). Additionally, with businesses across the world relying on cheques from national governments for over a year, companies may be reluctant to be seen to be spending as much as they did on business travel.
In balance, after a year of everyone working from home, there is a growing sense of urgency that people need to reconnect and have that human touch again. The business community will in time move away from this 'Gatsbyian' style of working where executives stay in their houses hurrying to phone calls every two minutes with no real connection with the outside world. As I have already stated, an integral part of carrying out business is about building personal relationships and most importantly establishing common ground. This is hard to do digitally. In response to the high costs of business travel, as long as the ROI (Return on investment) is higher than the price of the trip, then it is money well spent. This is particularly hard to quantify as the value of working lunches and late-night drinks are not always visible but can be invaluable when doing business in new markets or strategizing for a new product. Meeting with other people exposes you to new ideas, different ways of thinking and helps develop a forecast for present and future challenges. Therefore, business travel will still represent an important cog in the machinery of corporate strategy. However, this does depend on the evolution of new variants of coronavirus, the degree of climate action and the reopening of international travel. Will you be flying to business events once travel opens up? Will you continue to opt for virtual events? Do you think business travel will ever recover?
Flying executives from one corner of the world to the other is a product of a globalised economy and a hyper-connected way of life. It is symbolic of modern-day capitalism and historically has facilitated global trade. However, with today’s technology people can meet in the comfort of their homes and attend high-value digital summits from their study. Although digital platforms are proven to have been effective in fulfilling the demands of a lockdown economy, business travel will return, just as it has throughout history.
By Henri Willmott