There has been a startling comeback for leisure travel in the US, but business travel is slow in returning to normal levels, reports Business Insider, see here.
In South Africa, there is also a slow return to corporate travel, and very recently a huge surge in leisure bookings as the world has opened up to South African visitors. But it remains to be seen when, or if, the SA market will be restored to its former proportions for either type of travel.
The revival of business travel is crucial for airlines, hospitality and travel companies globally. In the US, according to the report, business travel has in the past accounted for 12-15% of US airlines’ tickets sold, and 45% of their revenues.
Scott Kirby, United Airlines CEO, said at the end of July that business travel was still lagging behind by 60%. Gary Kelly, CEO of Southwest, reported that his airline was seeing a drop of 69% in the business travel component, but predicted that corporate travel would improve after September.
Before the advent of COVID-19, it has been accepted for the past 15-20 years that in the South African retail travel market, of all bookings processed by agents, the lion’s share (65%-plus) has for many years been taken up by corporate bookings, and most retail agencies are structured to deal with corporate business.
The predominance of corporate travel has also played a part in the fortunes of international airlines on routes to South Africa, and on domestic airline routes too.
Travel News asked Franz Von Wielligh, Head of Innovation at XL Travel, how the two segments currently line up in the XL group.
“We saw gradual growth in August but with some tremendous spikes during September and October. Leisure travel was definitely a key driver for growth initially as international destinations lifted travel restrictions for South Africans. The opening of Mauritius was definitely a sugar rush, with bookings streaming in. With the return to Level 1 restrictions and government allowing more people to congregate, we have seen a massive increase in MICE business.
“An interesting growth point is the return of SMME corporate clients. We have seen increased intra-Africa travel demand, which indicates that companies are getting back to business,” said Von Wielligh. “Large multinational corporate clients are still a little reluctant to let their staff travel, and we might only see a full return to ‘normal’ levels from the corporate sector mid-2022.”
Lara Saunders General Manager of Sure Giltedge Travel, told Travel News that since the removal of South Africa from the UK’s red list, and the relaxation of regulations for entering the US, the business had seen a definite increase in travel, not only with corporates but also with many new leisure enquiries. “Pre COVID-19 our business was dominated by corporate travel and a smaller percentage accounted for leisure travel. The pendulum has definitely swung towards leisure. We have had a huge influx of enquiries and they continue to come in, even though COVID-19 and quarantine restrictions are still dictating the destinations for South Africans. Currently, Mauritius, Zanzibar, France, the Netherlands, Greece, the UK, Canada and the US are the most popular leisure destinations.”
Said Saunders: “I don’t think that the leisure spike will be temporary. COVID-19 has changed many people’s views and aspirations and travel now is top of everyone’s to-do list. In my opinion, if we continue to tick the boxes in making memories, leisure travel has a much bigger role to play in traditionally corporate agencies.”
“I foresee some good, quick growth for the rest of the year, with demand maybe levelling out by the end of the year, and returning to steady growth next year when all travel destinations come back online,” added Von Wielligh.