Business travel is back on the agenda for Australian professionals but some of the country’s largest employers say many work trips will be replaced with video calls after they embraced the technology during the COVID-19 pandemic.
Holidaymakers have powered the early recovery of Australia’s domestic aviation market and lucrative corporate travellers have started to return to airport lounges as well, with Qantas reporting this month that corporate bookings were back to 65 per cent of pre-COVID levels. However, companies are exercising a lot more discretion when it comes to signing off on work-related travel.
Major companies say they expect employees will travel less for work after the pandemic. Credit: Getty Images
Wesfarmers managing director Rob Scott said executives and managers at his Perth-headquartered conglomerate (which includes Bunnings, Kmart and a large industrials division) had resumed inter-state travel, with there being ”no substitute” for person-to-person contact to build relationships and monitor how the business was operating .
“However, we do expect our previous use of air travel to decrease as a result of the much greater experience and capability we have developed over the past year with other forms of communication... particularly video conferencing,” Mr Scott said.
“We are giving much more thought to whether we really need to jump on a plane where something can be done as effectively via video conferencing.... [which] has many potential benefits in cost, time and wellbeing, and for the environment.”
Telstra’s group executive for transformation, communications and people Alex Badenoch said the past 12 months had shown that the telco’s staff “don’t need to be working in the office together to innovate”.
“While some business travel will be part of the future, it will be far less than what we were used to pre-pandemic,” she said.
Qantas expects to flying at around 90 per cent domestic capacity mid-year. Credit: Edwina Pickles
Health insurer Medibank said it will be “more intentional” about when and why people travel as it moves to a more flexible office structure post-pandemic, while Woolworths believes some internal company meetings that previously required interstate travel will now happen online.
“[But] you can’t replicate the value of a floor walk with a store manager or an on-farm visit with a supplier using video chat,” a spokesman for the supermarket added.
Business clients are airlines’ most lucrative customers and their expensive tickets - often booked at short notice - underpin the industry’s profitability.
However Jamie Pherous, managing director of the $2.7 billion ASX-listed Corporate Travel Management, said he was confident the pandemic would not have a long-term effect on domestic business travel demand.
“People say they’re not going to do much [travel], they’re going to do more video conferencing until they don’t win a customer and someone else wins it because they got there in person,” Mr Pherous said. “For about a year they haven’t been able to win business, fine-tune supply chains, see their people and get them to talk strategy - these are the things people want.”
Mr Pherous said that his company’s booking volumes in Australia and New Zealand were back to more than 85 per cent of pre-COVID levels as of last week, and most (almost 90 per cent) of his clients were travelling again. The last to do so were the local offices of large international firms that still have global travel bans in place.
Graham Turner, managing director of Flight Centre - which made around 40 per cent of its bookings from business travellers before COVID - sees a bigger threat from video conferencing and lasting COVID-19 travel protocols.
He expects corporate travel across the 23 global market Flight Centre operates in to only recover to 80 to 85 per cent of pre-COVID levels by 2024, even after COVID-19 is no longer deemed a threat.
“There’ll be a bit of impact from video conferencing,” Mr Turner said. “But in the end nearly everyone agrees that you’ve got to get people in a room if you want to achieve good strategic decision making.”
Mr Turner added that similar to the suite of new security measure put in place after the September 11 terrorist attacks, lasting safety measures from COVID-19 would make some people more likely to skip business travel when possible.
Qantas chief executive Alan Joyce told an industry conference two weeks ago that the airline expected the corporate travel market to shrink by 13 to 15 per cent because of a shift to video conferencing. However, he said Qantas could make up that loss if it claims a larger share of the domestic travel market by stealing clients from Virgin Australia, which has relaunched as a “mid-market” airline following its bankruptcy last year.
Sydney Airport’s latest traffic figures, released last week, show domestic passengers were at one-third of pre-pandemic levels in March. Qantas expects to be flying at about 90 per cent of its pre-COVID capacity by mid-year.
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