Tourism should bounce back faster than business travel.
History shows that after a recession, business travel takes longer to rebound than tourist travel, say Kevin Sneader and Shubham Singhal, global partners at the consulting firm McKinsey & Company. After the 2008-2009 financial crisis, international business travel took five years to recover, compared with two years for international "leisure" travel.
Peer pressure will fuel the resurgence of business travel, the firm says. "Once a company returns to face-to-face meetings, competitors won't be able to hold back and will do the same," the partners say.
Leisure travel, in contrast, is driven by the human desire to explore and enjoy, and that has not changed, the firm says. One of the first things people do as they grow more prosperous is to travel. First close to home, then farther and farther afield. "There's no reason to believe that the rise in global prosperity will reverse itself or that human curiosity will diminish," says McKinsey.
The use of technology during the pandemic, and the economic constraints that many companies will face for many years after the crisis ends, could augur the beginning of a long-term structural change in business travel, they say.
This article is a Magazine Supplement for the February issue of the Insurance Journal.
