Intelligent Investment

Recovery of Business Travel Part 2: The Case Against a Complete Recovery of Business Travel

The cases for, and, against a complete recovery are conceptual and not data driven because abstractions from historical data following previous shocks to travel demand are inappropriate since behaviors were unaffected then by significant technological advancements in telecommunications that altered business travel options.

January 13, 2022 8 Minute Read

traveler checking in to hotel

“The future ain’t what it used to be.” -- Yogi Berra

A recent edition of Hotel Currents makes the case that domestic business travel will completely return to levels experienced before the COVID-19 pandemic. Note that this prediction does not include a timeframe in which the recovery will be complete, only that the forces identified and also listed below will eventually overcome the barriers to a total recovery. Also, no attempt is made to disect business travel into group and transient segments.

The cases for, and, in this edition, against a complete recovery are conceptual and not data driven because abstractions from historical data following previous shocks to travel demand (e.g., 9/11) are inappropriate since behaviors were unaffected then by significant technological advancements in telecommunications that altered business travel options. The technology may have advanced far enough by now to serve as substitutes for certain forms of business travel. Interested readers are encouraged to go to for a reading of Part 1.

The case for a complete recovery of domestic business travel is founded on the following three arguments supported by academic and professional studies:

1.  People believe in the power of face-to-face communication over teleconferencing.
2.  People have an innate and instinctive desire to travel.
3.  The rate of return on investment in business travel has been computed to be surprisingly high.
4.  Productivity gains from business travel correspond to about half of those from research and development.

Pessimism May be Growing

A lot of ink has been spilled in financial press outlets during 2021 about the return of domestic business travel. The tones of some of these articles appear to be decidedly pessimistic regarding the speed and even the possibility of a full recovery of business travel to pre-pandemic volumes (fear sells!). Some of the perceived pessimism likely is related to the emergence of COVID variants and expectations for future mutations coupled with the ongoing debates about vaccinations and immunity. Recent hotel demand segment data and informal discussions with hotel industry participants aren’t encouraging about an acceleration in the number of business trips at this time thus amplifying the pessimism sound waves. [1]

Making the Case Against

In Part 2 of my exploration into conceptual explanations for and against the full return of business travel, I develop the case for permanent reductions in future business interaction away from home and the office. The case is based on the following:

1.  The arguments for a complete recovery of business travel have counterfactuals.

  • Face-to-Face Communication Preference It would be easy to dismiss the necessity of in-person business meetings. Recent telecommunication advancements and adoptions have not yet destroyed this preference. They have heightened the realization that not all business meetings are the same. Some meetings don’t require face-to-face interactions when lower cost, more convenient alternatives exist, but creative thinking and making new business contacts still comes from in-person contact.
  • People Have Instinctive Desires to Travel The late-pandemic resurgence of domestic leisure travel suggests that these desires may be satisfied by non-business trips. Surveys (See, for example, King, 2021) suggest that some people now travel to rental accommodations (i.e., the mobile office model) seeking escapes from primary residence work environments. Others have become accustomed to being at home more and consequently doubled down with investments in their living spaces (See Crawford, 2021).
  • The ROI of Business Travel Financial returns on business travel investment inarguably have been high but the studies supporting these ROIs were performed well before the pandemic. The monetary investments to support business travel are also high. These outflows annually exceed $100 billion and comprise about 10% of corporate budgets. The remote meeting opportunities appeal to some corporate managers as potential cost savings and margin increases. Myopic managers may consider outflows for business travel as line-item expenses rather than investments. Not only can employees attend many meetings from their home, business office, and mobile office, but companies can also achieve cost savings by reducing the funds allocated for office space. Given that many companies are generating record profits while business travel is well below pre-pandemic levels, the incremental ROIs from business travel will need to be recomputed given recent technological advances. Take away – the boss could be a budgetary hero for letting you stay at home (or local office) to work.

2.  Technology and Other Emerging Trends

In Part 1 I provided a conceptualization of the intersections among telecommunication innovations, business travel, and remote work. None are static – each is dynamic. For example, one study finds that the potential for remote work was only 71% realized during the pandemic (Bick, et. al., 2020). And, of course, the amount of remote work will subside to some unknown level once the pandemic ends.

Arguably telecommunication innovation will continue as the most dynamic. It isn’t close to being over! Consider the possibilities for eliminating business travel from continuations of the following trends:

  • Holograms and Metaverse - The recent announcement that Facebook Inc. will undergo a name change to Meta Platforms Inc. and a strategy redirection to follow was a stunner. Mark Zuckerberg stated that Facebook has been in the business of providing the technology to connect people in the real world and now seeks to do the same in the virtual environment. The Metaverse relies on 3-D visualizations. Unifying them and other human traits is likely well into the future. However, holograms, an early available Metaverse technology, exist today.

Reporting on hologram innovations (see, for example, Brown, 2021 and Houser, 2019) reveal some startling advancements and identify issues slowing widespread adoption. More than 10 years ago a group of Japanese scientists, for example, created touch-sensitive human projections as portrayed in Exhibit 1 (Note: the person on the right is not all there!). This stream of research continues thus extending interpersonal virtual reality (Houser, 2021). Lack of progress toward in-home adoption according to Brown (2021) is related to projection equipment costs and technical support on the receiving end of holograms. He also notes that “software advancements are unlocking ways to use laptops, computers and smartphones to engage with and stream holograms emitted elsewhere.” Personal training innovations in holographics and remote one-to-one synchronous relationships from companies such as Peloton and Mirror, for example, offer a preview of what is to come.

Exhibit 1: Japanese Hologram Touch-Sensitive Innovation


Source: Hines (2010).

Finally, as noted in Part 1, studies such as by Tull (2020) identify certain interpersonal problems associated with remote business interactions including:

  • Communication inefficiency caused by the absence of non-verbal cues.
  • Hinderances to relationship building and trust.
  • Misinterpretations of meanings that lead to conflicts among participants.

Adoption of hologram and related technologies will help ameliorate these problems.

Take away – more and different types of business travel for meetings will likely succumb to improved technological alternatives.

3.  Societal Inhibitor – Corporate Green

The industrial nations of the world and corporations are focused as never before on reducing CO2 emissions. For some companies, business travel contributes more than any other activity to their carbon emissions, and air travel accounts for most of this total (PwC, 2020). The target now rests squarely on the backs of large corporations to be more environmentally conscience by limiting business travel. Take away – environmental concerns provide another headwind for a complete return of business travel during the post-pandemic period.

Case Seemingly Closed

The frequency of business travel will not return to pre-pandemic levels despite traditions linked to in-person meetings and the potential returns on investments from companies sending employees on the road. Unforeseen behavioral changes involving business meetings occurred during the pandemic period. Improved telecommunication technologies were the root cause of this shift and appear to be spurring additional teleconferencing enhancements. Humans’ innate desires to travel will manifest in increased leisure travel. The metamorphosis favoring leisure travel appears to be underway and will cause modest structural changes in the U.S. hotel industry.


Bick, A., A. Blandin, and K. Mertens. 2020. “Work from home after the COVID-19 Outbreak,” Tech. rep., CEPR Discussion Paper No. DP15000.

Brown, D. 2021. “Will Holograms be the next innovation in the post-pandemic workplace?” Washington Post, February 14.

Crawford, J. 2021. “Study Reveals the State of Home Offices in 2021.” Craftjack, October 6.

Danstadli, J. M. et. al., 2012, “Video Conferencing as a Mode of Communication: A Comparative Study of the Use of Videoconferencing and Face-to-Face Meetings,” Journal of Business and Telecommunications 26(1), 65-91.

Hines, M. 2010. “32 Hot Hologram Innovations .” Unique.

Houser, K, 2019. “Scientists Create Holograms You Can See, Hear, and Feel” Futurism, November 15.

King, R. 2021. “Revenge Travel and the Rise of the Mobile Office.” Fortune, October 10.

PwC. 2020. Managing our Travel Emissions. UK

Tull, M.T. et. al., 2020, “Psychological Outcomes Associated with Stay-at-Home Orders and the Perceived Impact of COVID-19 on Dailey Life,” Psychiatry Research 289, 1-6.

Weinstein, M. 2021. “Business Travel is Back: Five Lessons We Learned During Travel Restrictions.” CSQ, October 26.

[1] In the U.S., leisure travel historically makes up approximately 55% of demand; business follows with approximately 30%; and meeting/group makes up the balance. Today, leisure is running well above long-run average at 70 - plus percent and business well below at 20%. Large group travel is almost nonexistent.

Economics and Hotel Financial Performance

CBRE Hotels Research specializes in translating national and local economic conditions into measures of hospitality market and property- level financial performance.

Contact Jack Corgel at [email protected] for questions and discussion.