Corporate retreats are reportedly making a big comeback, despite companies announcing layoffs and hiring freezes. Cheddar News speaks with Matthew Parsons, corporate travel editor at Skift, about the status of business travel and how it could impact the overall sector. 

The Elusive Comeback of Corporate Travel

Welcome back to closing bell and cheddar news everyone as more companies are embracing zoom meetings and remote work, it's become increasingly difficult to foster corporate culture as employees don't always see each other in person on a regular basis. So instead companies are now reportedly turning to lavish retreats in this post pandemic world and meanwhile business travel that was supposed to make a comeback this year hasn't quite happened with experts now saying it could take two years longer for spending to recover to those 2019 levels. Well joining me now is Matthew Parsons corporate travel expert at Skiff to travel industry news site Matthew thanks so much for coming on the show. So we do have some conflicting data here. I think we're all kind of still trying to figure it out in real time. But let's start by talking about these corporate retreats making a comeback. It seems why are companies opting for them? Well, I mean I think you know the first half of the year, you know the champagne was flowing now these budgets were just through the roof. So the company type of managers were told you know there's no there's no limit on the spending, You just you just go for it. So we're seeing a lot of secondary cities outside the capitals which we're seeing lots of leisure rebound. They were getting a lot of business. I mean they were consulting companies sending people to theme parks believe it or not in kind of april time. So there's a huge emphasis on getting that, you know, the company, the employees to reconnect to meet each other for the first time, you know, they haven't met each other for two years. A lot of these new starters were coming in so it's definitely a boom time in the first half of the year. Yeah. So how do you basically remedy the fact that the stock market is selling off? We ended at a new low today, we reached a new low today during the regular session on a friday to round out what was a down week um that there are global economic recession concerns. Business travel isn't quite there, but companies are still willing to spend, How do you explain that? I think, I mean just a few weeks ago we had google saying um to their staff, look we're going back to business critical only now this is a term we heard during the pandemic. So this sends alarm bells I think, you know there's there's worries about the recession. So the first things that get cut marketing and travel. So there are now, you know, concerns from, you know, I think especially from the airlines and hotels that people will now start cutting back, you know, they've they've had these retreats, they've spent a lot of money, I don't think people could have expected or predicted, you know the the flights and the and the room rates would have gone up so high so people are really raining things back in there. So I do want to talk about business travel to Matthew, I mean, how much of it has to do with costs versus the pandemic? Maybe some people still don't feel comfortable traveling amid the coronavirus pandemic and don't yet feel comfortable getting out there. Do we have a sense as to what is holding business travel back? I think the road warriors were eager to get back out there and they are, they are the ones who probably driving the travel. I mean, we've heard, you know, complaints that there's, there's too much pressure on some people to do the traveling. You've got these, you know, the younger employees perhaps who have adopted the remote work ethos. A lot more than other companies. Look at other people and they're willing to stay at home. They've got used to this lifestyle. So the question now is, you know, how do they, how do, how do companies encourage, you know, those people to get back out there? So the dynamics have shifted a lot. Yeah. Is there any impact on leisure travel? Matthew, any knock on effect that we see happening in the business world on those who want to travel for fun. I mean, I think Ed bastian, the ceo of Delta Airlines was talking at the Detroit economic club just recently and he noticed that the, during the pandemic, the leisure travelers were upgrading to business class and premium class seats and once they do that, you know, they're not going back, You know, they're happy to carry on doing this. But what's happening now is that those airlines will be losing out on traditional business travelers. So we're talking, you know, the kind of the tech companies that were traveling a lot before the consulting companies that were traveling and are massively massively down. So I think, you know, there's gonna be more demand for premium products, but maybe not so much on the, on the business class side. Any other trends that you're seeing in the overall travel space, especially as we head into fall and even looking into the holiday period. Right? I mean we know when it comes to holiday spending at least for gifts, people are expected to spend earlier. Any early indications as to what the holiday travel season might entail. I think one trend we're picking up is this kind of, you know, there's more micro meeting. There are these company off sites for smaller companies, but I think, you know, we had Vasu raja, the chief commercial officer of american Airlines talking at the global forum this week and what he noticed was a huge uptick in employees traveling from companies below 100 people. So these are the new in my mind, these are the new corporate travelers, you know, they're, they're traveling midweek. Um you know, they're, they're combining that we talk a lot about the blended trip. So they're combining business travel and leisure travel. So I think this is gonna be a huge issues going forward, any indication as to how the situation at airports might be getting better in the future. Right? Long lines worker shortages, you name it, cancelations, delays, weather related issues, covid issues. Is there any hope to make the travel process smoother in the months ahead? This is the question and I think you know I'm based in France and the situation for example in europe is has been pretty bad. I mean schiphol in Amsterdam has has really suffered a lot of airline staff and airport staff are you know, starting these these strikes over pay and working conditions. So I think we're in this, you know this is going to be an ongoing situation and people do return to trouble then you know these strikes are gonna gonna keep on happening and I think the airlines also are still facing this kind of labor shortage. You know, they they've got they've got the staff coming back on, they've got the pilots but now it's just a case of training them so you know this is probably gonna go on for you know, maybe be able to unfortunately okay we'll be bracing for it Matthew even though we all want to get back out there and travel again like normal times Matthew Parsons corporate travel expert at skits Matthew, thank you