Many experts are talking about business travel recovery. Airlines and hotels are optimistic and see an increase in business travelers. However, the big corporations are pessimistic and communicate that they will not travel for business or have meetings as they did before the pandemic break-out. Thus, the way companies conduct business has forever changed.
Another way to explain what has happened is to apply the Jobs-to-be-done theory in general to business. One example is to sell products and services. Companies sell products and services through a salesperson at a physical meeting, in a store, by telephone, on the internet, or through a virtual meeting. During the pandemic, companies discovered new ways of selling their products and services. Stores started to sell online. Salespeople had to close deals over virtual sales calls. The new sales channels worked, and some even performed better than the old ones. Virtual selling is more efficient, the cost is lower, and a salesperson will make more calls than if all sales calls had to be physical. The job of salespeople is to sell and not to go on business trips. If there is a better way to sell, this method is now the default way of selling.
Hotels compete with virtual meeting tools
The tools for virtual selling will become better over time. Therefore, these tools are the major competitor for airlines and hotels. As a result, airlines and hotels will likely lose market share to these competitors. It is the same as records and songs in mp3 format will lose market share to streaming services like Spotify.
The hotel industry sees glimmers of hope in an increasing booking volume of individual business travelers, meetings, and groups. Still, it is a bubble because people have not met in person for almost two years and want to meet again. However, that does not mean they return to the same physical meeting frequency as before the pandemic. Therefore, business travel will never come back to the pre-pandemic level, and therefore, hotels need to replace business travelers and meetings with other guests.
Some behavioral trends accelerated during the pandemic. One trend is remote work, which has nothing to do with business travel. Instead, it helps to kill business travel since people can now work virtually from everywhere. In addition, remote work means that people can finally live where they want and have the job they want.
Leisure travel is the future for hotels as long as people want to travel for holidays and explore other parts of the world. The demand is strong, and as soon as governments lift all restrictions, leisure travel will boom. However, there might be obstacles on the way forward if politicians invent new ideas to restrict travel. Resorts, holiday destinations, and other typical leisure properties should not worry too much about their future. However, it is more problematic for standard business hotels to attract white-collar workers that have the luxury of choosing where and how to work. As a result, these hotels will struggle to recover and need to consider whether the hotel should convert to something else like a leisure hotel or residential apartments.