At the beginning of the pandemic I argued that the naysayers were wrong – we would not social distance forever, and a vaccine would help bring back travel – but business travel would still never fully return.
We’ve incurred the one-time cost of transitioning to online work, and it turned out better than many expected. There’s been a return to office but it won’t fully come back. And some meetings really can be done over Zoom, even if it isn’t the same thing as in-person.
People are no longer afraid of Covid-19, in the limit. Travel overall has boomed. Restaurants filled up. But office towers did not.
Here’s one chart showing work from home has become permanent. And that means managed business travel will be permanently impaired.
Another indicator that #WFH is permanent: public transit journeys stabilizing at 35% below 2019 levels.
This raises concerns over the survival of public transit systems. Costs are heavily fixed – think train and subway networks – but revenue is way down with 35% less journeys. pic.twitter.com/JnJtuPYCg5
— Nick Bloom (@I_Am_NickBloom) December 29, 2022
Some companies wanted employees back to work, but it usually wasn’t every day. There have been fewer meetings in offices because the people you’d meet with aren’t always there. And when they’re in the office, they often take meetings with other people in the office over Zoom (or, heaven forbid, Teams).
There’s an equilibrium developing where substantially more jobs are done from home than before the pandemic. We aren’t going fully back to office. That means there’s a lot of business travel which no longer makes sense.
Some companies are pushing for return-to-office. They’re looking at metrics like how many meetings are being held on Fridays instead of how productive employees are. A recession may give companies more bargaining power. But even so return-to-office doesn’t always mean returning every day, and as long as there’s less in-office work than there used to be certain kinds of business travel will remain impaired.
People who work from home will travel to a big company retreat once a year. They may go to a conference, take a business trip, but many won’t be on the road the way they once were.
There’s a new kind of business travel, commuting occasionally from remote work to the office instead of taking the train or the freeway. But office towers are going to take a long time to fill back up because there’s a new equilibrium where not as much office space is needed per worker as before.
Eventually total business travel numbers will grow beyond what business travel numbers used to look like because of the pandemic, the result of compounding growth, but we won’t be as high as we would have been without this exogenous shock.
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This content was originally published here.
