There are reasons to be optimistic about the recovery of corporate travel following a prolonged coronavirus-related slowdown. Business travel continues to lag the leisure recovery, but Hilton CEO Christopher Nassetta sees reasons for optimism. While overall it’s back to about 50 per cent pre-Covid levels, Nassetta told CNBC it’s more like 75 per cent in some markets.
“This is as good as I’ve felt since the pandemic started in terms of where we are and what I see in forward-looking trends and bookings in the business,” Christopher Nassetta said in an interview on Closing Bell.
Leisure travel has been propelling the industry’s recovery so far, and Christopher Nassetta said he expects to see record numbers in that category this summer. However, a return of business travellers is crucial for a complete rebound in the hospitality sector.
“Business travel, while it’s lagging, it’s coming back. It’s probably about half the levels that we saw at the prior peak. Group and events are lagging that, but they’re coming back.”
One particular reason to be hopeful is that the hotel operator is experiencing stronger corporate bookings in markets where the pandemic situation has improved.
“As businesses are starting to reopen offices and an expectation of in the fall kids going back to school, people start to travel for business again, and they start to congregate in meetings. If you look at markets even in the U.S. and certainly China where they’re further along, we already see business travel back to effectively 75 per cent of volume levels that we saw in 2019.”
Many companies plan to adopt more flexible work arrangements postpandemic. Given that change, there have been questions about how travelling for meetings and conferences fits into that hybrid-work equation. Some have suggested business travel will never fully recover.
Jamie Dimon has expressed dissatisfaction with remote work and videoconference meetings during the Wall Street Journal CEO Council event. The JP Morgan Chase chairman and CEO said he was “about to cancel” all his Zoom meetings.
“We want people back to work, and my view is that sometime in September–October it will look just like it did before.”
Jamie Dimon also said JP Morgan had lost business to competitors in some instances during the pandemic when rival bankers travelled for in-person meetings.
Companies that suffered financially during the pandemic will have to build up their travel budgets over time, Christopher Nassetta said. But in general, he feels there is a broad desire to cut back on virtual meetings and conferences.
“The anecdotal evidence, as I talk to our big customers and to friends who run businesses and the like, is that there’s a huge amount of pent-up demand to get out and travel for business and to get out for group meetings and events, just because it’s been so long since they’ve done it.”