“Bleisure” trips (when employees extended a business trip for leisure) were virtually eliminated in 2020, as 92% of companies cancelled or suspended all domestic travel in April (according to the Global Business Travel Association); that figure rose to 98% cancelled for international travel. 

Every business has had to change how they operate and many are leading with a remote-first approach. Meetings that used to be expected in person have shifted to Zoom, from project kickoffs to investor pitches to virtual conferences

As case counts lower and businesses move back towards the “old normal,” we’re digging into the data to see where business travel has bounced back, and where shifts may be more permanent.

Here are our key findings:

  • Professional service and construction companies had the highest rates of travel in 2020, ending the year at the same rates as they began, while Tech companies saw and maintained a steep decline. 
  • Car rentals and gas purchases have bounced back, unlike the aviation industry—ending 2020 at only 1/3 of the previous transaction count for business travel. 
  • Overall, travel spend only made up 3% of total spend in February 2021 compared to 9% in February 2020.

Which industries are still spending on travel?

From the road warrior to the labor worker, travel used to be a requirement for certain industries. Against the backdrop of 2020, however, many industries have eliminated the need for travel almost entirely—especially if the need was “just to have a chat.” 

Bill Gates predicted that in a post-Covid era, business travel will be reduced by more than 50%. Using Divvy transaction data, we looked at how travel spend was trending for businesses and found that for certain industries, he was right. 

For example, the technology community started 2020 as one of the highest spenders in our business travel data set. In April, technology travel spend plummeted below zero (refunds) and hasn’t come close to resuming previous spend amounts. 

In December 2020, technology companies only spent 17% of what they did at the beginning of the year on travel.

However, not all industries have seen such drastic change. The construction industry, one that is largely dependent on employees being in a physical location, saw virtually no change in 2020. 

Professional services did see some decline in March and April of last year. However, as these companies depend on having a strong interpersonal relationship with their clients, we did see travel numbers resume in the fall, landing at the same place come year end.

Which types of travel spend have bounced back?

While some industries’ rate of travel was not largely impacted by Covid, we were reassured by the fact that most businesses followed best practices for social distancing by deferring to car travel over airline travel. 

When we isolated Merchant Category Codes (MCCs) in travel spend in order to break down the types of travel purchases made with Divvy cards, we found that car rentals and gas stations have resumed previous spend amounts, where airlines and hotels are still lagging behind. 

In fact, based on SMB purchases in 2020, the aviation industry was hit the hardest—ending 2020 at only 1/3 of the previous transaction count.

DATA: Airline purchases vs car rentals in 2020 (for SMBs)

Airline spend vs car rental spend by SMBs
Month of transaction date Airline spend Car rentals
January 2020 100.00 65.36
February 2020 98.96 70.54
March 2020 23.41 44.18
April 2020 -9.14 22.25
May 2020 6.41 27.82
June 2020 17.24 41.76
July 2020 11.06 51.34
August 2020 13.72 65.03
September 2020 25.69 68.95
October 2020 33.46 88.26
November 2020 24.17 75.26
December 2020 20.48 72.50
January 2021 29.45 78.96
February 2021 34.76 100.00

*Based on Divvy spend data

We normalized our data sets by dividing each number by the maximum spend for that category and then scaling the resulting numbers from 0 to 100 (modeled after Google Trends). By doing this, we were able to view airline spend vs car rental spend in proportion to each other. 

While airline purchases and car rentals both dipped in April, car rentals returned to previous spend amounts by September, unlike airline industries who experienced negative spend numbers at the start of the pandemic and are yet to bounce back. 

What’s next for business travel?

We’re optimistic that business travel will be able to resume safely as states follow CDC guidelines and more vaccines are rolled out. However, as Bill Gates suggested, we’ve also seen travel changes that feel more permanent—for better or for worse.

DATA: Travel spend as percentage of total spend (for SMBs)

Travel spend as percent of total SMB spend
Month of transaction date Cleared amount
January 2020 8.76%
February 2020 8.77%
March 2020 4.43%
April 2020 1.17%
May 2020 2.44%
June 2020 3.69%
July 2020 3.25%
August 2020 3.84%
September 2020 3.62%
October 2020 3.88%
November 2020 3.14%
December 2020 2.57%
January 2021 2.84%
February 2021 3.33%

*Based on Divvy spend data

Overall business travel spend has increased, but is far from bouncing back. The Wall Street Journal measured an increase in hotel and airline bookings for personal travel, but business spend seems to be in a category of its own. Many have adapted to the new normal, and even prefer it. 

Andy Rumbles, Director of People Advisory Services at EY, put it this way: “As ever, the old cliche “everything in moderation” feels appropriate. A future without business travel would be a more insular world, however the pre-COVID world was too intense—for our connectedness to our loved ones, for the health of the planet, and perhaps as a representation of the delta between the haves and have nots.”

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