Issue # 6 Happy Holidays (823 Words/4 minutes)
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What if I told you that some some convention centers and meeting facilities might be heading in the same direction as large shopping malls…extinct.
As we move into 2022, one of the unanswered questions coming out of the COVID-19 recovery is, “when will business and meetings travel will fully return to pre-pandemic levels?” It's a great question and one that could have a significant impact on some destinations.
We do know that one of the realities coming out of the pandemic was rural destinations recovered much more quickly and, in some cases, didn't miss a beat. Driven by consumers' quest for outdoor experiences and open spaces, beach, mountain, and desert destinations fared well to attract existing and new visitors.
Those destinations that have relied on meetings and conferences have seen a very different result. In California, for example, city destinations like San Diego, Los Angeles, and San Francisco have felt the impact of reduced demand from this important segment.
A recent Skift article was looking at business travel and how quickly it might return indicated that domestic travel to urban centers was returning in 2021. The article goes on to state, "While lagging behind the leisure segment, business travel is projected to catch up at a similar pace."
It is interesting to note that where you get your information has a different perspective. I have noticed that outside the tourism and hospitality industry, the story is different.
A recent Forbes article quoting new research from Morning Consult has a very different take.
"Morning Consult throws a wet blanket on a strong rebound for business travel. In its latest State of Travel and Hospitality report, the data analysis company reveals that four in ten American business travelers (39%) say they will never go on another work trip."
A recent Bloomberg survey supports this view. "Eighty-four percent of companies surveyed indicated they plan to spend less on travel post-pandemic. A majority of respondents cutting travel budgets see reductions of between 20 and 40%.
It's not hard to figure out why. The Bloomberg article goes on to state, "Having saved billions from slashed travel budgets during the pandemic with only a marginal impact on operations companies, banks, consulting firms, and government offices will be hard-pressed to explain why they would go back to their old ways." A second factor why companies are reconsidering business travel is reducing environmental impacts. Many corporations have committed to carbon reduction goals, and plane travel is one area to reduce those levels.
These changes do not suggest that travel for business is going away but that it may not return to what it was. To assume it might return to previous levels could be problematic.
It presents a fascinating question is business travel, meetings, and conventions heading to a pre-pandemic level of return, or has COVID changed the market moving forward? It might depend on what lens you are looking through and what you see. From a tourism and hospitality lens, there is no question the industry is rooting for a return, and many hope the rebound is promising. But looking through a technology industry lens, things are a bit different. Using online meeting platforms, that industry is working hard to disrupt the same tourism and hospitality industry business, meetings, and conference travel. The pandemic gave them the opening they could only dream of to accelerate the acceptance of online meeting technology on a mass scale. Now someone from the tourism and hospitality industry might say, well, there is nothing like being in front of someone connecting and building a business relationship. And they might be right to a point. But here is the concern that technology has successfully disrupted just about every industry it can. Many meetings, conferences, and conventions now offer hybrid approaches that include online and in-person options for attendees.
The fox is in the proverbial henhouse. From auto sales to banking, travel distribution systems, and more technology disruption has had a profound impact, and it will only get better. Remember your travel agent and how important that relationship was?
Perhaps the most glaring example of the impact of technology disruption in retail sales and its impact on shopping behaviors and malls.
According to a recent article in The Week, "The Retail Apocalypse."
A decade ago, consumers began turning in larger numbers to Amazon and other online retailers. The steep, nationwide drop in sales for brick-and-mortar stores has been accelerating in recent years, but the pandemic put their decline into overdrive. Major retailers closed 12,000 stores in 2020, after an already devastating 2019, when more than 9,300 stores closed. Another 80,000 stores — 9 percent of the nation's total — will close in this "retail apocalypse" over the next five years as e-commerce sales grow, predicts a report from financial services company UBS.
As you can see, it doesn't take much of an imagination to consider a very different scenario in the tourism and hospitality industry. Are convention centers destined to be the next mall regarding the impact of technology disruption? One hopes not, but the thought does loom.
For more information: Carl@smgonline.net.