With PPP2 up and running, CERTS coming soon for the motorcoach industry, a national mask mandate, and a worldwide vaccination program underway, the question now turns to “when will travel come back?” Two travel-centric associations have crunched the numbers and pondered that very question.
“Travel’s Next Great Chapter” is how U.S. Travel Association President and CEO Roger Dow described the coming era for the American travel and tourism industry following the challenges of the pandemic that saw the industry lose 4.5 million jobs by the end of last year—the most of any U.S. industry.
Dow delivered his remarks during the annual State of the Travel Industry address to the National Press Club in late January, where he acknowledged the hardships the pandemic has inflicted on travel—both as an industry and as a fundamental part of American life—but struck an optimistic tone about the prospects for travel’s return. Inspired by the Biden administration’s goal of “Build Back Better,” Dow laid over several key areas where travel could lead the recovery—albeit in a post-pandemic form.
“Our goal is not simply to recover what we’ve lost, but to rebuild an industry that’s even better positioned than before the crisis—one that’s more globally competitive, more innovative, and more unified,” Dow said. “Travel has spurred economic recovery before. We saw it after 9/11, following the 2008 financial crisis, after the BP oil spill, after devastating multiple natural disasters. But this is our toughest challenge yet. Some predict it will take five years to recover from the pandemic. That’s far too long.”
The Biden administration is also tackling climate change, of which could have a monumental impact on travel overall in many different sectors. As such, Dow laid out goals that include investing in infrastructure and the future of mobility, reimaging air travel, and streamlining travel and security facilitation.
On the business travel side, Global Business Travel Association (GBTA) released its annual BTI™ Outlook, a detailed analysis of business travel in 2020, with projections for 2021 and beyond. The BTI Outlook, now in its 12th year, is an exhaustive study of business travel spending and growth covering 75 countries across 48 industries.
In a word: Patience, although travel should see some gains in the second half of 2021. According to the Outlook, the magnitude of these losses and their impact on travel suppliers is unprecedented: the 2020 business travel spending losses are expected to be 10 times larger than the impact of either 9/11 or the Great Recession of 2008. But you probably already knew that, so let’s focus on recovery.
Here’s what the BTI Outlook Found Regarding Recovery:
- A 21 percent increase in business travel spending is projected in 2021. Most of this gain is expected to come at the end of 2021 as vaccinations increase globally and consumer confidence returns.
- In 2022, the BTI Outlook forecasts further acceleration in business travel, including a significant pick-up in group meeting activity and international business travel.
- While annual business travel spending growth is expected to slow somewhat in 2023, it is projected to remain well above historical average rates of growth of 4.6 percent. By the end of 2024, annual business travel spending is projected to reach approximately $1.4 trillion, nearly equaling the 2019 pre-pandemic revenue peak of $1.43 trillion.
- A full recovery to pre-pandemic levels is expected by 2025.
“The pandemic has been devastating for business travel and it’s clear our industry will take some time to recover given the challenges we’re facing on multiple fronts,” said Dave Hilfman, interim executive director of GBTA. “Economic recovery is already underway, although very uneven across countries and sectors. The continued rollout of the vaccine will be central to recovery globally, as will decisions the new Biden administration makes regarding global trade and border and quarantine.”