As More Companies Let Employees Work From Home Permanently, What Is the Outlook of Business Travel?
By Linchi Kwok, Associate Professor at The Collins College of Hospitality Management
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.
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?
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