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As more companies let employees work from home permanently, what is the outlook of business travel?


When the pandemic hit the global economy in March, business travel was estimated to lose $820 billion in revenue. Under the best scenario, businesses were expected to reopen in late spring or early summer.

As we entered into the summer, indicators showed travel and hospitality businesses were picking up, but we all knew travel recovery would not occur until people are taking business trips again. “Travel, as we knew it, is over,” concluded by Airbnb CEO Brian Chesky.

Now in October, we still have not contained the coronavirus. To make it worse, new COVID-19 cases now surge again across the US and Europe.

More companies let employees work from home permanently

Many states and countries have already lifted the stay-at-home orders in May. Schools and companies are taking a different stand, however. For example,
  • Twitter was the first U.S. major company that announced its permanent work-from-home plan in May.
  • Pinterest canceled a lease in an unbuilt project in San Francisco with a one-time $89.5 million fee, citing work-from-home shift.
  • In September, the 23 campuses in the California State University system also extended virtual learning through spring 2021.
  • Earlier this month, Microsoft told its employees that they could work from home permanently with manager approval.
  • Dropbox extended the company’s mandatory work-from-home policy through June 2021. Furthermore, the company made remote work the standard practice.
What does the Gallup poll say about work from home?

Gallup just released a follow-up report last week about remote work with the latest September 14 – 27 polling data. The results suggest,

Remote work has reached its “ceiling”

  • 51% of Americans being surveyed said they were “always” working remotely in April when tight restrictions were in place. The number dropped to 31% in September.
  • 25% of Americans reported they were “sometimes” working remotely in September, as compared to 18% in April.
  • 42% of Americans “never” worked remotely in September, an 11percentage point increase from April.
45% of workers still show concerns about COVID-19
  • Minimal monthly variations between April and September were observed regarding workers’ concerns about being exposed to the coronavirus at the workplace.
  • In the most recent survey, 26% and 29% said they were “not too” or “not at all” concerned about the coronavirus, respectively.
  • 11% and 34% showed “very” or “moderately” concerned, respectively.
About one-third of workers want to work at the office at this point
  • No dramatic monthly changes between April and September were reported regarding workers’ attitudes towards remote work.
  • 35% who worked remotely said in the September survey that they would prefer to continue doing so or at least, as much as possible.
  • 30% preferred to work remotely due to the concern of COVID-19.
  • 35% said they would like to return to work at their office.
Work from home is not helping the travel and hospitality industry

Work from home does not encourage people to commute or travel for business. On top of that, companies are cutting travel budgets for their staff as they face the pandemic and uncertainties about the economic outlook. When more companies turn to zero-based budgeting to cut costs, people do not travel for business unless it is absolutely necessary and well-justified.

When more companies encourage their employees to work at home and cut travel budget, and at the time, over 60% of American workers prefer to work remotely, the outlook of business travel is not looking good. Most likely, it will take years before we can see a real travel recovery.

What can travel and hospitality companies do to embrace the work-from-home trend?

It is not easy to think positive amidst the COVID-19 crisis, but a couple of ideas may deserve our considerations. Remote work, for example, also promotes the work-life-tourism trend.

In Dropbox’s case, the company plans to set up “Dropbox Studios” for employees who need to meet or work together in person when it is safe to do so. Can hotels turn some of their guestrooms into remote studios or offices for people who need to work in teams? 

A few luxury hotels in Las Vegas began promoting an “Executive” deal or a work-at-a-hotel package. Some Boston hotels also offered work-from-home packages, providing guests access to one guestroom from 8:00 am to 6:00 pm and other hotel amenities.

Besides day-use packages, hotels in tourist destinations may also be able to attract the “digital nomads,” a group of remote workers who want a work-from-anywhere life. Big hotel chains, such as InterContinental, Marriott, and Accor, have launched or plan to introduce monthly rates for long-term work-from-home guests. Others provide travelers unlimited access to a collection of their hotels with a “subscription.” Travelers, for example, can pay $2,500 a month in a yearly subscription plan to access 300 accommodations within its global network with no extra fees.

What impacts does work-from-home have on the travel and hospitality industry? What can hotels and tourism companies do to embrace the work-from-home trend?

Note: This viewpoint is also published at Multibriefs.com. The picture was downloaded from the Royal Park Hotel Hong Kong.

Comments

  1. Sebagai pemain judi togel online, tentulah kita mengharapkan bisa mendapat situs atau bandar togel yang tepat. nah, ini adalah 5 bandar togel terpercaya dengan bonus terbesar dan depositnya juga murah. sangat rekomen sekali deh buat kalian coba.

    ReplyDelete
  2. After the pandemic, work-from-home became the norm and seized air travel by an estimate of $820 billion in revenue. Hotel companies aren’t selling their standard business packages to companies because corporations are continuing to cut expenses, thus damaging the hospitality industry. The hotel industry should start changing its standard of operation to serve guests during the day and create a subscription and monthly payment for “work at home package.” If the hotel chain starts offering cross-over amenity programs across their establishments worldwide, it may entice travelers to purchase such subscription and increase air travel again. Hotels and airlines need innovations and ways to protect and display to the guest that they are following proper sanitation procedures. The hospitality industry has your safety first in mind.
    Robert Chiou HRT 3500 Section 1

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  3. Working remotely has reached its height due to the pandemic. Although businesses are slowly reopening, many employees are still working from home. Working from home has pretty much put a halt to business travel. As more employees favor working from home and businesses do not have the funds to allow for business travel, it seems as though this market segment will be out for a long time. About 50% of hotel guests travel for business reasons, such as for meetings or conferences. This is a large market to lose, even for a brief time. The loss of this market in the near future will mean low revenue and profits for the lodging industry as a whole, but especially for those hotels which cater specifically to that market. Loss of profits will most likely force operations to cut costs. The likely result would be Furloughs or layoffs of hotel staff, such as housekeeping, front office staff, maintenance workers, etc. A skeleton crew will be left and employees may have to do tasks that other workers would normally do in order to keep the hotel running. A lack of employees may cause the hotel to underperform as employees are spread thin and required to do things that they are not trained to do or have the qualifications for. Less than optimal operations of a hotel can lead to poor service and guest dissatisfaction, which will likely lead to guests not returning to the hotel, contributing to the already diminishing profits due to COVID-19.

    Robin Carapia HRT 3500 section 2

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  4. ....Continued.
    Hotels and tourism companies must really hone down and focus on their target market and finds ways to add value to their businesses, such as creating work-from-hotel spaces. The sales and marketing department must think creatively to make working spaces that are not only functional, but offer inspiration too. These work-from-hotel spaces might be sought out from those who want to break free from their homes and need somewhere where they can be inspired and form ideas. Creativity is key in trying to increase revenue during this unprecedented time.

    Robin Carapia HRT 3500 section 2

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  5. The corona virus has changed the norm for everyone around the world. The new trend seems to be working from home. The virus has caused students to study from home and workers from a business to work remotely from home. Unfortunately, some people are not as lucky and they are put on furlough, or simply laid off. This could potentially be a permanent norm for companies to have their employees work for home. It only makes since because there is still 45 percent of workers having concerns about the corona virus. I completely understand why they still might have concerns either for themselves or a family member that could have an underlying condition which could lead to their death.

    Victor Slater HRT 3500 Section 1

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  6. Work-from-home impacts the travel and hospitality industry because there is less people that travel for business. Everything is online nowadays due to the pandemic and the day and age. It is very alarming to see that the hospitality industry in major cities are getting get hard because of the employees working from home. They do not leave their homes and have no need to. Hotels and tourism companies can embrace this change from working at the office to work-from-home trend by having deals for much needed staycations. Not only for the person who is working at home but their families that are sick and tired of being home. The more people who are not traveling for business are becoming family man's and women. Now they have to switch their target markets. This means the families and leisurely travelers are getting a higher rating then the business travelers right now.
    Questions: Should the hotels have family discounts and more tourist packages? Or do you think families will be too scared to go out during the pandemic?

    Denise Ramirez HRT 3500-01

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  7. Because of the outbreak this year, I think the liquor industry in many places has been hit very hard by layoffs and money. And many companies allow employees to work from home. Faced with a weak economic outlook, many companies are cutting back on travel budgets and corporate costs. The outlook for business travel is not good. I don't know when I'll be back.

    Mingyin Lam HRT 3500-02

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  8. Ashley Boomsma HRT 3500-02November 11, 2020 at 5:49 PM

    I understand that the numbers for travel have significantly decreased due to the pandemic and this article clearly shows the statistics. However, I think we may be on the brink of a sharp turn in the hospitality industry. We must adapt to the new normal and do everything in our power to make travel and restaurant experiences completely safe and trustworthy for all people. Airplanes in reality happen to be one of safest places for people to be because of the intense air blowing down on every seat it prevents stagnant carbon dioxide or circulation. Every 2 hours the air has been completely renewed and purified in the airplane. If people knew this they would be much more likely to try out traveling. All we need is more hotels and restaurants to step up and tighten the cleaning and serving policies so that people can safely travel with ease. We might see the numbers go up yet! This is could be a great opportunity for the hospitality industry to be reinvented and show everyone what it's made of.

    Ashley Boomsma HRT 3500-02

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  9. I think that people are hesitant on traveling and staying at a hotel mainly because they do not know how safe it is and if everything is truly sanitized. When the pandemic first hit people were staying away from traveling but now I feel that people are more likely to stay at a hotel or to take an airplane because the rates are low which attracts those who have to or want to go out. The work-from-home trend impacts these industries because there is a big decrease in their sales, which will have a strain on their long-term success. I think that with this “second wave” of the corona virus, people will definitely want to work from home and not travel for work.

    Viviana Madrigal HRT 3500-01

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  10. I think work from home has impacts on the hospitality industry by having businesses to take losses on their business or close because they can not keep up with the expenses. Many companies are working from home and I think there are not many statistics to back up that the workers are not getting their work done. This means that companies might want to stop renting spaces for employees and allow them to work from home because the business can run the same. Hotels can have employees work home if they are on the creative side where they work on advertisements or departments that are mainly on the computer.
    Alvin Lai HRT 3500.02

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  11. Working from home has hurt the hospitality and travel industry a lot. If people are working from home they are most likely not renting out big conference rooms at hotels and traveling at all anymore. The corona virus outbreak has halted a lot of the hospitality business and it shows a lot. Personally I have family that works in hospitality business that started working from home but soon after got laid off due to their places of employment wanting to cut costs on labor. The hospitality industry relies heavily on the economy doing well and right now its not doing so hot. Right now the industry is at an all time low and probably even after the pandemic is over it will be bad because people have to adjust going back to "normal" and staying in a hotel and traveling wont be their number one priority.

    Calvin Heng
    HRT 3500 Section 2

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  12. I think working at home is a good idea in this pandemic. Workers need time to recover from this pandemic. Safety is more important than the company's revenue. Without healthy employees then there is no healthy company. This way, employees can always prepare for the future pandemic if there's one. Hopefully we won't have anything like this in the future. Companies need to keep the health and retired benefits for the employees because this will motivate the employees to work harder.

    Andy Huang
    HRT 3500 Section 2

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  13. I think that working "remotely" is just a way for lazy people to keep getting paid without actually doing their job. I understand that the pandemic hit us all really hard in different ways but that does not mean we should take advantage. Many employees like myself who work in a hospital do not have the luxury of staying home and staying safe while working "remotely". Everyone should be mindful of what they are doing including the companies.
    Melinda Lopez
    HRT 3500 Section 01

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  14. Travel companies such as airlines, and cruise ship companies take a big hit with this pandemic and they do not really have any benefit opportunities that they can utilize. All they can do along with hotels, restaurants, and other hospitality related businesses is to cut costs as this pandemic has hit everyone in the United states, in terms of the economy. The trend at the start of the Covid-19 lockdown was to work-from-home and that trend has become a norm in some companies either alternating between working in the office then working from home or working from home completely. For those who work-from home completely the forms of entertainment is limited and so hotels have embraced this and sells a subscription to those working from home and they can access accommodations that the hotel accommodates for the payment of the subscription. Indiana Korompis HRT 3500-02

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  15. Hotels offering rooms for a work-from-anywhere package might a new frontier that we will soon learn about. I honestly feel like that most of the animosity and doubts towards it is because it's new. Let's keep in mind how people didn't believe Airbnb would take off and here we are. I think with this pandemic work-from-home has become a new thing we can expect to see with companies and with HR departments to offer potentially. I can see this with people who are sick or have maternity leave to be expected to work from home.

    Byron Lee HRT 3500.02

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  16. Since the outbreak of covid-19, many businesses have been seriously affected. Most businesses choose to close their doors and shorten their business hours. Many enterprises also choose to work at home. We have no doubt that the impact of the hotel industry is very serious, more than half of the travel agencies in the United States have closed down. Most states have home orders, and most people choose to stay at home and work at home. Many enterprises have also taken self-help measures to try to recover or reduce losses. Tourism industry is the industry most affected by the epidemic. At present, many people engaged in tourism industry have begun to turn to other industries. This is a very difficult and special period, no one and no company is not affected. The tourism industry should also do a good job in protection and wait for a new opportunity, after all, COVID-19 will disappear.
    HRT3500--02 Di Huang

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  17. During this COVID-19 season, the business districts in popular cities are really hitting these hotels, restaurants, and event spaces hard. A property that comes to my mind that is affected heavily is the Hyatt Regency Seattle which has 1,260 hotel guests rooms, and has 103,000 square feet of meeting space. From an HR point of view, I can imagine how many cuts have been made and positions seized due to COVID-19. To further embrace the work-from-home trends, hotels and tourism companies must work closely with their corporate partners to find ways to serve them whether that is through changing rooms into office spaces or utilizing their outdoor spaces for small events or meeting space.

    Sean Mayor HRT 3500 Section 2

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  18. The pandemic has affected all of us in different ways, and working from home is definitely becoming more common. Although individuals are now traveling less for business, they might be more interested in traveling to get out of the house, while still being able to do their work online. The travel industry will need to adapt to the circumstances and cater to guests that are now working from home. Some examples could be comfortable workspaces that are safe and clean, or other complementary items that guests might not have access to at home. Although the travel industry is taking a hit right now, there is also potential in what companies can do to promote business travel, albeit a different kind of business travel.

    Anna Liang HRT3500 Section#1

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  19. Ellyse Kapicki HRT 3500.01November 16, 2020 at 11:00 AM

    Due to COVID-19 I believe the work-from-home has a huge impact on the travel and hospitality industry. At first, it was really hard for the travel and hospitality industry, but they are now finding ways to adapt and provide safer COVID-19 free environments. To embrace the work-from-home trend hotels and tourism companies can provide take out options if they have restaurants on their properties to continue revenue flow. They can also promote free WIFI for guests and business/office supplies. Some people believe work stays at work and when they get home do not want to deal with it or bring it with them, so hotels and tourism can provide that workspace for them. Also, some hotels have kitchenettes which also reduces the spread of human contact and interaction preventing COVID-19 from spreading because you can cook and make food there instead of going out.
    WORDS: 144

    Ellyse Kapicki HRT 3500 Section 01

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  20. Priyank Patel HRT 3500 Section #1November 16, 2020 at 12:41 PM

    According to this article and people I have spoken to, work from home has changed many peoples' jobs in ways they never thought. Business travel is at an all time low and is at risk of never going back to what it was. As people are getting more and more used to virtual meetings and getting things done remotely, leaders will learn that it is more cost efficient to keep doing so in the future. This will cut travel budgets and even change some jobs permanently. I listened to a lecture by Javier Cano and Thomas Fuss who work at LA Live, and they said that they see almost no business travelers these days. I have also notice many more advertisements for hotels offering a place for people to work where they can have free WiFi and privacy. These hotels are offering rooms for 7-8 hours for people to work and return home. They have created a new segment of customers, and I think that in some place, this will continue to be a small market when restrictions are lifted.

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  21. Rebecca Becerra HRT 3500.01November 16, 2020 at 1:57 PM

    Working remotely has become the new norm for many people and companies due to the coronavirus outbreak. Many companies you included like Pintrest, Twitter, and Microsoft have the ability to work remotely with no problems. What about other companies that cannot afford to have people work from home? There is still about 35% of people who would rather work in their office then at home. People can find their own homes distracting, especially if they have their children home as well. I believe working remotely is the safer and more effective method to prevent the spread of covid. Hopefully once the coronavirus is less extereme and controlled we will still have an option to work from home if preferred.

    ReplyDelete
  22. Timothy Lam HRT 3500.02November 16, 2020 at 2:36 PM

    I believe that as this pandemic continues, only time will tell on when the vaccination will be out and the cooperation of all people to begin complying state/national guidelines to social distance and keep wearing their masks. In the United States, cases continue to rise whereas in parts of Asia like Hong Kong or Taiwan, cases have been only single or double digit numbers. This pandemic has definitely opened up a new definition of what it means to work from home and I think that many companies will look more into doing this in the future so that it is not only more cost efficient, but this is a more flexible way for people to work while allowing free-time to do other things. I believe that hotels should offer better and free Wifi to travelers as that will benefit both the hotels and the customer. I think another factor to worry about in the hospitality industry similar to the issue of working from home is that now there are many hotels with automated robots that handle check-in and baggage. I think that tourism will pick-up within the next few years.

    Timothy Lam HRT 3500.02

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  23. What impacts does work-from-home have on the travel and hospitality industry? What can hotels and tourism companies do to embrace the work-from-home trend?
    Hotel are targeting customers who have different purpose for traveling. One of purpose is for leisure and another one is for business. During the covid 19 pandemic, the quarantine policy eliminates people's activities at outdoor and the demand for hotel decrease. After the covid 19 pandemic, people would like to travel outside for fun and book more rooms in hotels. However, the habit of work from home was cultivated in the period of quarantine, and people who was traveling for business would prefer open virtual online meeting instead of meet one on one personal. It will cause hotel lose huge amount of profit at the target market of customers who travel for business. In order to maintain the productive of hotel and gain revenue from customers, for short term, hotels need to provide more entertainment services for customers who go to trip for fun, which make up the lost for business traveling. For long term, Hotels can design a special style of rooms for people who like to work from home. The independent library room style will be a great choice for people who like to work at home. Since most of people have a difficult time to focus on their work in home, hotel's study room can make them feel productive and be able to pay attention on their work. Hotels can charge less amount of money for this kind of room because the rooms do not need to be design in a large size or have other service. The hotels can also provide free coffee service to attract more customers to come.
    YingShan(Ella) Long HRT 3500 02

    ReplyDelete

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