February 22, 2024

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Travel Beyond Boundaries

How Leisure Travelers Benefit (And Airlines Can Too)

5 min read

Business travel as we knew it, is down. Not all airline executives will admit it and some industry CEO’s will probably intellectualize it too much, but it’s true. That’s just a fact.

What that means for airlines isn’t necessarily all bad news and what it means for leisure travelers is in many ways positive.

The world has changed and change can be scary, but also exciting. Here are the patterns that are gone and the new trends that will fill their place. Plus, all the ways leisure travelers will save.

a row of yellow taxi cabsa row of yellow taxi cabs

Yes, Traditional Business Travel Is Down

Some indicators suggest we’re at 75% of pre-pandemic business travel levels and other data sources trend slightly lower. However you precisely slice it, we’re missing a full quarter of the previously booked airline seats taken by businesses.

As also noted by View From The Wing, this number has an added level of deflation for those who benefited most from business travel, because in 2019 things were trending to go well beyond the record highs of that year. That’s clearly not going to happen.

How Leisure Travelers Benefit From Business Slump

This shift in the previous way people traveled presents massive leisure opportunity from the days to avoid to the seats you can afford.

New Opportunities To Upgrade

Airlines spent most of their time from 2015-2019 optimizing their product offerings — aka the cabins and spaces on the planes — to maximize their revenue from business travel. What that meant, particularly for long haul focused airlines, was the installation of more business class seats to fit the trend.

Now, with more seats than before and fewer business travelers filling them with highly dependable (and lucrative) corporate contracts, there’s new pressure to market these seats to leisure travelers.

Where there’s sales pressure and leisure interest, there’s usually better prices that follow. We’re already seeing more opportunities to use points up front and there’s a keen interest from airlines to upsell leisure travelers headed further afield on the delights of a flat bed. Paired with selling them a hotel, it’s a great business.

a glass of wine on a table in an airplanea glass of wine on a table in an airplane

Less Reliance On Seasonality And Peak Days

Whatever cabin you want to fly, there’s a little more room for you during peak times. And no, I definitely don’t mean airlines adding inches of legroom back.

With a tapering of business travel there’s less need for leisure travelers to optimize around shoulder season or periods when business travelers stay off the road. If this happens, prices should become more level year round.

Even on a day to day basis things will change. Business travelers dominated the Monday and Thursday/Friday travel set making it hard for leisure travelers to afford flights during these days. That’ll change.

Seasonality is a real factor too. Business travelers always disappeared during the summer and gave way to leisure, but a 25% dip in their previous peak times will see more opportunity to travel affordably all year.

Could Steadier Pricing Help All Involved?

People don’t like unpredictable pricing. If we look at the illicit drug industry — which is always one of the most profitable and top performing — steady pricing has been a real staple of their business model for many decades and has been a factor in retaining the market stability.

Price fluctuations even in inflationary or regulatory periods are very minor. It’s created lots of repeat customers.

I can’t help but think that if people had less worry about huge fluctuations in price up to 5X from month to month, there might be steadier demand for travel with people a lot more confident to prioritize it.

a group of palm trees with the sun shining througha group of palm trees with the sun shining through

New Business Travel Normal Brings New Opportunities And New Travelers

I think Gary Leff summarized the new normal opportunity as best as can be done in a sentence when he said that people who never traveled for work prior to 2019 now will.

Working Remotely Means More Travel

Working remotely, as more and more people are, affords incredible opportunities for the personal life on a day to day basis. But there are legitimate arguments about total alignment and mission buy in, which can be easier to achieve in person.

What this means is that people like developers, or customer service reps who might not have traditionally been part of the traveling force of a company are likely to travel to a company off-site or group event at some point in the year. They never would’ve before, so in many ways the new normal takes away volume but adds breadth.

With no requirement to be in person, people can also travel more than they would have within limited time off. I can just work from somewhere else and don’t need to only think about travel for days off.

For many, myself included, sometimes working from a desk with a different view in a different part of the country, or world, is enough. I’m fortunate to be able to flip from the US to the UK easily and a few months on the other side is always nice.

a man standing on a dirt path with bushes and mountains in the backgrounda man standing on a dirt path with bushes and mountains in the background

And yes, if I plan to shift locations to take advantage of this locational flexibility, I’ll be bringing my family. I’ll be buying a few tickets rather than just my company stumping for one for me. The trade off is I’ll be stumping for all of them, so I’ll be more sensitive on price. There’s more volume being sold so everyone wins.

With less of a focus on corporate contracts and behind the scenes deals I can’t help but think we’re embarking into an era of price transparency and competition. Those behind the scenes prices only for large corporates will somewhat shift to customers who are willing to bundle flight and hotel through an airline for leisure travel.

Ultimately for airlines, it’s about creativity to price with a new customer in mind and create meaningful subscriptions or opportunities which capture loyalty and reward travel in less traditional ways.

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