Covid-19 Impact on Business Travel

The impact of Covid-19 on the travel industry has been tremendous. Specifically corporate travel is now forecasting to take 3-5 years to rebound in cities like New York City. According to a recent study the loss of spending on business airfare, hotels, restaurants, and entertainment amounts to roughly $2 trillion globally in 2020. With many companies putting a halt on corporate travel for an extended period of time, or until a vaccine is out for Covid-19. Many others are looking at the pros and cons of travel and the need of being in the office. Having worked the downtown Manhattan market, the peak nights where hotels could maximize revenue were Tues/Weds; where average rates in Spring and Fall midweek were $400+/night. With companies also looking at the price of rent for commercial real estate and now looking to not return to the office, the downtown market will be impacted the most in New York City. Midtown and Times Square will see a rebound first once international travel returns to the United States and the demand for tourism returns.

In a survey of 300 companies in May, per The New York Times, 93% said remote work or meeting policies would change permanently, while two-thirds said the same for travel policies. With a concern for their employees health and also looking to trim cost, we will see a big shift in the corporate travel market segment.

While the recovery for hospitality will be long, the industry is resilient and has faced past downturns during the 2008 financial crisis and 9/11. Domestic and regional travel will rebound before international travel and there is still pent up demand with many travelers wanting a change of scenery after having been locked inside due to restrictions.