As leisure travel is starting to resume across the world, business travel is set for a more sluggish recovery. The ease of videoconferencing has stripped the need for business travel since the pandemic hit in early 2020. As a result, the economic recovery of city centres may be prolonged while resorts and leisure travellers could benefit.
An aversion to the city could result in resorts being more popular
Cities have been associated with higher Covid-19 cases and sudden breakouts, resulting in a greater risk of infection due to overcrowding and the sharing of more facilities. Due to this, businesses may choose to avoid cities when hosting their next business conference or event, in order to keep employees safe and encourage more delegates to attend.
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Corporate events planners may turn to multifunctional resorts for events and conferences, as they offer all amenities usually in one place. This will leave the minimal need for business travellers to exit the resort and enter crowded urban areas. Resorts will also have strict uniformed hygiene and safety measures in place, ensuring employee safety at every point during their business trip.
Internationally recognised hotel brand Hilton, which caters for both business and leisure guests, has jumped on this potential trend. The global hotel giant has recently signed a property deal for three all-inclusive luxury resorts in Mexico. The company will be able to pitch these resorts as venues for events to corporate event planners.
This is a positive move for the company, as hotel and travel industry experts expect that group and convention travel is set to recover faster than business transient travel. It may also give business travellers the exposure to continue to collect and redeem loyalty points, which will encourage further loyalty in future trips. This is important for post-Covid-19 travel, where booking directly could give added benefits to the traveller including flexibility, which is imperative for current travel.
A lack of city events will smooth the path for leisure travel
According to a GlobalData Survey in Q3 2019, 38% of 29,744 global respondents said they typically take city break holidays. As city hotels are not welcoming the usual high number of business travellers, hotel operators will have to boost revenue from other sources. Some hotels in the city may look to reduce the nightly rate, in order to attract more leisure visitors.
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By GlobalDataLeisure travellers who are willing to travel to the city will be able to take advantage of this cost-effective option. According to a Verdict community survey*, 11% of respondents said their budgets were less due to Covid-19 and 35% stated they can not afford to go on vacation at all. These lower rates offered by hotels could entice budget-conscious travellers.
Additionally, 24% of respondents in the same survey said their budgets remained the same as before Covid-19 and 18% said budgets were ‘a lot’ higher than pre-Covid-19. This could also benefit tourism-dependent businesses such as restaurants and attractions, as a lower vacation budget spent on accommodation could leave more budget to spend on other tourism businesses.
Overall, there are some benefits created by the lack of business travellers visiting cities. However, with international business travel numbers not set to recover until 2024, hotels dependent on this kind of traveller may struggle to recover.
*Verdict community survey of 167 respondents, live since 19th May 2021.
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