Treatyland

Taiwan and New Zealand show business travel’s future

They handed out the New Zealand CIO Awards in Auckland’s Civic Theatre last week. For those of us locked down in the northern hemisphere, the photos come from a glittering world. There are 650 people crowded into the pre-event drinks, leaning in to make themselves heard. A few are posing arm in arm. Astonishingly, someone is reaching for a canapé from a proffered tray. There are no masks.

This may be a view of our past, but perhaps also our future, when we, like New Zealand, have controlled the virus. The country has suffered 25 Covid-19 deaths. Life has a normality denied to much of the world. What can it teach us about business travel post-Coronavirus? Was Bill Gates right when he said business travel would be down 50 per cent on its pre-pandemic level?

I became interested in travel patterns in largely coronavirus-free countries when I spoke to Steven Pan, chairman of the Regent Hotels Group. He is based in Taiwan, which has suffered just seven deaths. Pan told me that local business travel was returning — in interesting ways.

Conference attendance in Taiwan was well down. People had discovered they could attend remotely. Intra-company office visits were also less common than pre-virus, but Pan told me he thought corporate leaders with subsidiaries in countries across Asia, with their differences in language and culture, would need to resume travelling to their offices to make sure company messages were heard. In the US and Europe, where multinationals largely operated in English, intra-company visits would not make a big comeback. The real business travel boom was in sales; you can’t close deals on Zoom.

New Zealanders are seeing similar patterns. Domestic travel has risen. International passenger numbers at Auckland airport were down 97 per cent in September and October compared with the same months last year. But domestic numbers, down by 53 per cent in September, were down only 35 per cent in October.

What business travel are New Zealanders doing? Darrin Grafton, chief executive of Serko, a travel technology company, says he has seen a pick-up in off-site meetings, as companies reintroduce team members to each other. This is necessary because not everyone has gone back to the office. Nick Queale, general manager for corporate travel at Flight Centre Travel Group, says many have settled into a pattern of three days a week at home and two in the office.

In spite of events such as the CIO awards, Queale said conference-going seemed an unnecessary expense to many companies. Travel for intra-company visits is still subdued. But face-to-face training was returning, as was travelling to conclude deals. Companies were taking a hard look at what travel was necessary and examining the return on investment. How vital they thought travel was varied by sector. Demand for travel in mining and manufacturing was particularly strong.

What would happen when New Zealand was able to open its borders? Would international travel take off? “Absolutely,” Queale said, but with a caution. Employers have always had a duty of care towards travelling staff. Until Covid-19 is defeated worldwide, health risk assessments will be even more important.

To what extent can we extrapolate Taiwan and New Zealand’s experience to other countries as they emerge from the pandemic? Company finances will be strained. Travel is always a target for corporate cost-cutting and managers are likely to be cautious about trip approvals.

Companies also feel pressure to limit flying for environmental reasons. Travel will be subdued for some years, but business is a social activity, and memories of this pandemic will fade. “We’re wired to forget,” Grafton told me. Business travel will be down, he said, but not by 50 per cent.

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