When will business travel return after COVID-19?

Oversee models one scenario seeing 30% of 2019 travel by the end of June.

It’s fair that travel managers look at as many forecasts as possible to prepare for the inevitable resumption and increase in business travel. But what natural sources can you use as bellwethers for an inherently unpredictable situation? With fluctuating supply and demand that will ebb and flow based on business needs and government restrictions, it seems an impossible task, lest we forget how airline pricing mechanisms will cope with these market fluctuations.

In scenarios like this, modeling the resumption of business travel is critical for Oversee to deliver corporate travel solutions effectively.

Using actual historical data to predict when your road warriors are likely to get back on the road

Each organization will have a different appetite to get back on the road and a propensity for risk. PAX boarded can be a fair model to give travel managers indicators of when their teams will resume their travel schedules.
If we look at data from the United States Transport and Security Administration (TSA Passenger Throughput) we can start to develop a model for industry recovery.

Year-on-year comparison of TSA throughput 2020 as a percentage of 2019 (Three-day rolling averages)

By using actual traveler data in the United States, shifting it so that the days of the week align, and creating a graph of the three-day rolling average, we can see a definitive trend by applying a polynomial to the model. The R-squared number shown on the chart is a number between zero and one, where zero shows no statistical correlation, and one is a line of a perfect fit.
Interestingly but perhaps expectedly, the lowest point on this graph corresponds almost to the day with the highest frequency of COVID-19 in the country.

Forecasting forward 40 days, it is not unreasonable, given the control of COVID-19 remains on track, to expect around 30% of passengers boarded compared to 2019.
Nevertheless, looking at all possible scenarios and applying best-case and worst-case modifiers is vital.

Modeling and predicting margins of error in the COVID-19 recovery

Adding a 1% daily increasing divergence indicates air travel in the United States to reach between 18% and 42% by the end of June, with 30% being most likely.
The volume of PNRs that Oversee analyze is also increasing, with a significant jump in flights booked now but for travel in July.

Defining your return to travel

Air travel is a means to an end and, in many cases, a financial end. Sales cycles that include face-to-face meetings have far higher close rates, often close to 40%, with around 17% of annual revenue riding on these deals. (Source).
There is a competitive advantage to be lost by trailing your competitor set when resuming face-to-face (albeit at a socially acceptable distance) meetings – this is a good reason that looking at the market should be a factor in defining the new air travel rules within your organization.
Policy decisions now don’t have to be set in stone; they respond to the current situation. The temporary relaxation of cabin class rules and reducing restrictions on the flexibility of fares can be on the table for discussion to mitigate risk and get your road warriors back to doing what they do best.

Subscribe for updates from Oversee — refreshing business travel insights delivered to your inbox!

Sourcing Optimization Icon
Press Release

FairFly Rebrands as Oversee Underpinning Travel Spend Optimization Leadership

The new brand builds on the company’s commitment to providing an all-in-one platform to optimize corporate travel spend and AI-powered automation tools for travel agencies.

The switch to a new company name comes during exponential growth for Oversee (formerly FairFly). Its outstanding customer base testifies to the business success of Oversee currently serving 29 of the Fortune 100, 86 of the Fortune 500, and 38 of BTN Corporate Travel 100 companies.

Read More »
We've rebranded
Explore more related posts
Rethinking static travel policy

Time to rethink your static travel policy?

Times are changing and traditional, one-size-fits-all corporate travel policies are no longer meeting the diverse needs of businesses and employees. Many companies continue to use outdated, static travel policies rooted in historic pricing strategies that aren’t even used by carriers any longer.

READ MORE »
Air Fares

How do I get the best negotiated airfares?

As securing discounted corporate airfares gets harder Negotiating the best corporate airfares can be tricky at the best of times. Many external factors are making the task even harder. Ever-tighter profit margins, fluctuating oil prices, and increased competition from smaller

READ MORE »
corporate fares

Getting the best corporate airfares?

Be aware of poor advice Book on Wednesday. The book is just before midnight. Shop around to compare airlines—book 57 days in advance. There’s no shortage of statistics and questionable advice on how individuals can secure the best price on

READ MORE »
10 tips for airfares

Top 10 tips when negotiating with airlines

Dos and don’ts when negotiating corporate airfares Negotiating the best deal with airline suppliers is one of the most significant tasks for a travel management company – and it’s rarely easy. Airlines face tight profit margins, pushed further by fluctuating

READ MORE »

See Travel Spend Optimization in action. Get a personalized demo!

Our solutions experts are here to listen and share how your peers leverage Price Assurance and Program Optimization. Let us show you how we can support you, your company, and your travelers.