Business travel and Covid-19: lost deals, impersonal online meetings, jobs at risk, and recovery will be slow, even as vaccinations roll out
- With borders closed and quarantines in effect, the business world is struggling with Covid-19
- Vaccinations offer hope, but it will take years for business travel and conferences to fully return, a professor says, and that will depress economic growth
A full reboot of global commerce requires business travellers being allowed to cross borders again. But even as vaccine roll-outs gather pace, a return to a pre-pandemic normal could be years away as many countries take a go-slow approach to reopening.
That’s a daunting prospect for executives like Sammy Tsui. The founder of China Tech Global, a company that sells sanitising equipment, says the inability to travel has translated into stalled and lost deals as potential clients aren’t able to test out products such as walk-through sanitation tunnels and thermal devices.
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Research last year by the Growth Lab at Harvard University’s Centre for International Development found a direct link between incoming business travel and the growth of industry. The ability to swap know-how facilitated by such travel was crucial to economic growth, it found.
That’s prompted the International Monetary Fund to warn that trade in services will recover more slowly than merchandise volumes, even as vaccinations help the global economy rebound this year at the fastest pace since 2007, spurred by trade and manufacturing.
The diverging pace of vaccine distribution between advanced and developing economies will mean only a gradual recovery in business travel over several years, with the resumption of critical services – such as machine repairs and audits – returning faster than other activities, such as conferences, according to Ricardo Hausmann, a professor of international political economy at Harvard who worked on the Growth Lab paper.
“I think this will translate into a productivity slowdown for the world,” he says.
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There’s been little major progress on easing travel restrictions since the year began, with quarantines and other curbs extended or tightened from the United States and Western Europe to New Zealand and Hong Kong.
A proposal by the International Air Transport Association for test or vaccine certificates to replace quarantines hasn’t gained traction with governments. Travel bubbles and digital health passports are other options that have been floated.
Even in countries where the virus has been quashed, cross-border travel has proven difficult to restart, as governments are reluctant to drop mandatory quarantines as the front line in their fight against Covid-19. Some Asian countries are willing to shorten their quarantine periods, however, for business travellers.
Plans for the city state to host the World Economic Forum’s special annual meeting have already been pushed back from May to August. Starting this month, Taiwan plans to allow shorter quarantines for business travellers, provided they meet a host of conditions.
Shorter travel turnarounds will become easier as low-cost tests are made more available, according to Gloria Guevara, head of the World Travel & Tourism Council. But a full reopening will only be possible with vaccinations on a global scale.
“All countries need to realise that they cannot get out of this alone,” says Karen Grépin, associate professor at the University of Hong Kong’s School of Public Health. “We need higher levels of global cooperation to get us out of this predicament.”
For now, executives such as Hong Kong-based Stefan Kracht, who advises and offers services to medium-sized European companies with operations in China, have put their frequent-flier lifestyles on hold. Online meetings, he says, have been effective in “continuing relations” with existing clients.
Before the pandemic, Kracht, managing director of Fiducia Management Consultants, was a frequent traveller to mainland China and to Europe. Without physical contact, he says, “the biggest challenge is winning new clients”.
