Corporate travel on the way back, but it’s patchy

Qantas says business travel is back to 65 per cent of pre-Covid levels, but for some it’s a fitful return.

Passengers will notice key changes when Qantas reopens its domestic lounges in July.

Corporate travel will never be the same but the surging number of suits in newly reopened airline lounges around the country suggests it is on the way back — albeit slowly. Last year, many workers discovered that what once would have required a flight and a boardroom meeting could be achieved in a videoconference. But technical issues and muted microphones have shown videoconferencing is not always an ideal replacement for the in-person meeting.

As business gets back to “normal” some companies have resumed staff travel, but ad hoc border closures and snap lockdowns have dented the enthusiasm for booking interstate trips: international travel remains largely off-limits because of a combination of continued external travel restrictions and a fitful vaccine rollout. And for those who are heading back to the airline lounges, there are plenty of rules.

Professional services firm Aon is moving to restart domestic travel, but as a spokeswoman tells The Deal: “In the future, international travel, including trans-Tasman, will be considered depending on border restrictions and the ongoing vaccine rollout. Aon’s travel policies and procedures include rigorous approval processes and business-case evaluations, and are updated on an ongoing basis.”

Many corporations are tossing up how the vaccine rollout will play into future business travel, but few have put forward policies yet. Some major banks have said they will strongly encourage staff to get the jab and may even look to hold workplace mass inoculations. But none has said staff will be forced to get the vaccine if they wish to travel overseas.

Bendigo and Adelaide Bank chief people officer Louise Tebbutt says while the bank has not introduced a checklist for staff who travel, it requires staff to obey all health instructions and directions. “That will include the wearing of masks in airports, use of hand sanitiser and washing of hands,” says Tebbutt.

Bank staff recently began work-related travel, including moving between branches, after months of videoconferencing. But before they are permitted to book desks in a branch office, staff are required to declare they have not been to any COVID-19 sites. However, the bank will not require staff to get vaccinated if they want to travel internationally for business. Says Tebbutt: “Our expectation is when people come to work they will meet our safety obligations but we don’t have a position requiring our workforce to take it or have it.”

She says the bank is taking tentative steps back into corporate travel “where there’s been a direct customer demand for it”.

“That will change over the next little while, but to date we’re being quite conservative about our travel and we’re really letting it be something that the customer, if it’s very important to them, (asks for),” she says.

A business banker at the bank, Darren Goodwin, has been back on the road travelling between community branches in recent months. “I like the face-to-face contact with the customers and seeing the staff in the branches,” he says.

Suncorp, which has teams across several states, has slashed corporate travel despite the end of lockdowns, with movements down more than 75 per cent on pre-COVID levels.

“As a Queensland-headquartered business with operations across Australia and New Zealand, the pandemic has challenged us to relook at the way we engage across the organisation and has shown we can lean more on our digital capabilities to remain connected,” a Suncorp spokeswoman says.

Suncorp allows travel only for critical events or essential business, including recent efforts to get assessors into northern NSW flood zones.

ANZ, which has operations across 34 markets, instituted a suite of guidelines at the start of the pandemic and only a fraction of staff were able to travel in the past 12 months. Some restrictions are being lifted and corporate travel has recommenced in some markets. An ANZ spokesman says: “We are currently at about 30 per cent of pre-COVID levels. International travel is only allowed by exception.”

In a market update early last month, Qantas pointed to the recovery in corporate travel, which has fallen short of the far stronger rebound in domestic travel. Qantas chief executive Alan Joyce reported corporate travel, including the small business segment, was now back to almost 65 per cent of pre-pandemic levels.

Speaking at the CAPA Aviation Summit, Joyce said the Australian domestic corporate travel market was different to markets in other countries. He said some sectors of the Australian economy simply could not work over videoconferencing and would require travel.

“There’s a lot of talk about videoconferencing (and) taking a big hit on the business market side,” he said. “When we’ve done our maths on it and we look at the level of corporate market that’s fly in, fly out resource based, it’s government based, it’s construction and manufacturing related.

“Then we relate the market that could be subject to being replaced by videoconferencing, like professional services and people having internal meetings this way ...”

The Sydney-to-Melbourne route, one of the busiest flight paths in the world and a fixture for corporate travel for decades, was mauled by the COVID-19 pandemic. At one point Qantas had only one flight a day, well down from the almost 45 flights each day before the pandemic.

On the back of the rise of videoconferencing Joyce said he expected a 13 to 15 per cent long-term drop in the corporate travel market, as many meetings once conducted after a short intercity flight would now take place online. But he said some businesses would still need to travel.

“What we’re finding at the moment is the SME market is less subject to being disrupted by videoconferencing because these are small businesses that need to travel, need to make contacts,” he said. “And we’re actually seeing good growth in that market coming back faster than the corporate market.” Qantas recently reopened its corporate lounges on the back of the bounce in corporate travel.

Corporate Travel Management tells a similar story about the rebound. In its latest market update the ASX-listed corporate travel agent reported it was returning to profit, breaking even in March, on the back of strong domestic bookings. CTM says bookings in Australia are now at 85 per cent of 2019 financial year bookings, while in New Zealand bookings are 160 per cent higher. It notes the vaccine rollout in the US and British market “supports expectations of a rapid return to corporate domestic travel and meaningful levels of pan-European and trans-Atlantic travel after the northern hemisphere summer vacation”.