Are business trips a thing of the past? | Travel DW | DW

In 2019, dozens of domestic and foreign guests traveled to Berlin to attend conferences and conventions, such as the annual international tourism fair, ITB. Their visits have resulted in considerable revenue for the transportation and hospitality industry. Estimates from the German Business Travel Association (VDR) show that in 2019, German companies spent a record 55 billion euros ($61 billion) on business travel, sending 13 million of employees traveling on business.

In 2019, more than 100,000 industry figures flocked to the Berlin ITB travel fair

The following year, business travel all but ceased. In an effort to contain the coronavirus, countries around the world have closed their borders. Countless conferences and trade shows have been canceled or replaced with virtual events. According to VDR estimates, in 2020 German companies reduced business travel by 80% compared to 2019. Last year was also bleak. The German transport and hospitality sector has taken a hit.

Airlines adjust to decline in business travel

Before the pandemic, Lufthansa, Germany’s largest air carrier, derived half of all its revenue from business travel. Selling business class tickets has been very lucrative for carriers, says Professor Yvonne Ziegler, an aviation expert at Frankfurt University of Applied Sciences. So lucrative, in fact, that some airlines, including Lufthansa, have relied heavily on business travelers and paid less attention to vacationers.

Today, major airlines like American, Delta, Emirates and Finnair have responded to the sudden drop in work-related travel by removing business class sleeper berths from planes and replacing them with premium economy class seats. They offer more legroom and better service, but at a higher ticket cost. In short, airlines are looking to appeal to leisure travelers willing to spend the extra money for more comfort. It is a decision born of economic necessity. “Very few conventions and conferences are happening right now, so few business travelers are flying, which means booking excess space on planes doesn’t make sense,” says Ziegler.

Professor Yvonne Ziegler smiles at the camera

Professor Yvonne Ziegler expects business travel to slowly resume

While she expects business travel to return, Ziegler believes the recovery will be slow. Still, she is cautiously optimistic as more countries lift restrictions for business travellers.

Hotels take a hit

Tobias Warnecke of Hotelverband Deutschland, an association representing most major German hotels, says his industry doesn’t track whether hotel guests are traveling for work or pleasure. Despite this, he estimates that business travelers typically account for 20-25% of German hotel stays. It is therefore difficult to calculate exactly how much the drop in work-related travel has hit the sector. What Warnecke can say with certainty, however, is that the past two years have been “catastrophic” in financial terms. Indeed, figures from the German Hotel and Restaurant Association (DEHOGA) show that hospitality sector revenues in 2020 and 2021 were almost half of what they were in 2019.

ACCOR's Ben Brahim smiling at the camera.

Ben Brahim leads ACCOR’s German activities

ACCOR, a major hotel chain operating some 350 hotels in Germany, has had a tough time over the past two years, confirms Ben Brahim, who heads its German operations. Many ACCOR properties, he says, are geared toward conference guests and business travelers. One strategy to deal with the shortage of corporate customers has been to target local businesses and office workers by renting hotel rooms as temporary workspaces. Remote work, Brahim says, has increased the demand for this service. Also, he expects business travel to pick up again this year. The need for interpersonal business meetings remains, he says.

Building relationships and trust

Claas, a German agricultural machinery manufacturer with production sites around the world, says most of its customers are overseas. As such, travel for work will remain essential for the company, spokesman Wolfram Eberhardt told DW. “Digital meetings can’t replace everything,” he says. Face-to-face meetings remain crucial for building momentum and launching new business ventures, he says. The same applies when it comes to meeting potential customers at fairs to present products. Customers want to know who they’re doing business with and who they’re buying from, says Eberhardt.

A person looks at many computer screens.

Berlin’s ITB 2022 Travel Convention Held Virtually

VDR Vice President Inge Pirner agrees. She is certain that work-related travel will not disappear in the long term. According to her, interpersonal encounters are crucial for companies wishing to win customers and establish mutual trust.

What will the future bring?

In 2020, Microsoft founder and philanthropist Bill Gates predicted that business travel would not return to pre-pandemic levels. He predicted that 50% of business travel would disappear in the long term, as companies now have a “very high threshold” for sending staff.

A man sits on a beach and works on his laptop.

Remote work is changing the business world and the travel industry

This view is echoed by the VDR, which predicts that the overall volume of business travel will decline significantly in Germany. After all, a reduction in work-related travel saves money, time and helps reduce a company’s carbon footprint.

That said, business travel will not be phased out entirely, as it remains essential for building trust, repairing relationships and promoting products. In addition, new hybrid formats combining business and leisure – the so-called “bleasure” trips – should gain in popularity. Similarly, there will likely be more people choosing to work remotely and becoming so-called digital nomads.

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