Corporate travel managers have projected that virtual meetings will replace 27 per cent on average of 2022 travel volume, according to a new Morgan Stanley survey. On average, travel manager respondents projected 44 per cent and 19 per cent of their travel volume to shift to virtual meetings in 2021 and 2023, respectively.
Morgan Stanley surveyed 138 corporate travel managers from 30 June to 12 July. About 32 per cent of respondents said their organisation had annual revenues of more than $15 billion, and 29 per cent said they had less than $1 billion, with the remaining 39 per cent in between. About 67 per cent of respondent organisations had an annual travel budget of at least $10 million. About 67 per cent are headquartered in the US, 19 per cent in Europe, and 14 per cent in Asia/other.
Most respondents expect virtual meetings to continue to cannibalise a significant portion of their travel volume in 2023. Nearly 63 per cent said virtual meetings in 2023 would replace 11 per cent to 50 per cent of their organisation's travel volume, while 27 per cent projected they would replace up to 10 per cent. Only 7 per cent projected virtual meetings wouldn't replace any travel in 2023, while 3 per cent indicated more than it would replace more than 50 per cent.
When asked why virtual meetings are replacing travel volume, nearly three-quarters of respondents cited that they represent a more efficient use of employees' time, and 72 per cent cited the cost reduction virtual offers. About 59 per cent noted Covid-19 concerns, while about 50 per cent cited environmental concerns and sustainability considerations, and 39 per cent noted higher engagement and participation in meetings and conferences.
Respondents' top reasons for replacing travel with virtual meetings varied based on geography. At 25 per cent, European companies considered environmental concerns as the most important reason to replace travel, compared with 5 per cent of US-based companies.
The future of travel budgets
The projected shift to virtual meetings seems to be reflected in slashed 2022 travel budgets, according to Morgan Stanley. About 52 per cent of respondents expect their organisation's travel budget to be slashed 11 per cent to 50 per cent from 2019 levels. Travel managers on average expect their 2022 travel budgets to be down 17.5 per cent from 2019.
Meanwhile, only 4 per cent of respondents projected their organisation's travel budget to recover to its 2019 level in the second half of 2021. Around 17 per cent forecast that to happen in the first half of 2022, 19 per cent in the second half of 2022, 20 per cent in 2023 and 16 per cent in 2024. Nearly a quarter projected their pre-Covid budgets would never recover.
Respondents from US-based companies were more optimistic about travel budget recovery of their budgets than were their peers elsewhere. About 17 per cent of US-based respondents indicated their budgets in the second half of 2021 would be higher than their 2019 level. In contrast, 10 per cent of European respondents and 0 per cent of respondents elsewhere projected their travel budgets would do so. Furthermore, 62 per cent of European companies projected cuts of greater than 50 per cent for the second half of 2021 as compared with 2019, while 45 per cent of US-based companies forecast the same.