Business Travel’s New Customer
Predictably, business travel was one of the sectors hit hardest by the pandemic. Considering the widespread layoffs in the technology industry, this sector has yet to fully bounce back.
In the third quarter of 2022, business travel hit just 71% of its pre-pandemic levels, according to data from American Express (AXP). While this marks an improvement from 35% over the same period in 2021, it’s clear that white-collar workers just aren’t jetsetting like they used to — and given the rise of remote work, may never be again.
Fortunately for the hotel industry, a different demographic has been picking up the slack: blue-collar workers.
Accommodating Small Business
Despite not being typically known for hitting the road, employees of small and medium-sized businesses consistently patronized hotels over the past three years. Business travel among such workers — including travel nurses, truckers, construction crews, and sales teams — hit 80% of its pre-pandemic travel levels in Q3 2022.
Many hotels have started to take notice of their new customer base and are even making accommodation changes to better meet their preferences. For example, some hotel bars are altering their hours to serve those who work night shifts, or swapping out craft IPAs for Coors Light (TAP).
Despite the slow recovery, business travel as a whole should continue trending up and to the right. This is mainly due to federal spending, such as the $1 trillion infrastructure bill signed into law in 2021, and a bill allocating $280 billion for semiconductor production passed in 2022.
This fresh funding will provide businesses of all sizes some extra wiggle room in their budgets, allowing for more travel expenses. According to industry insiders, this will be especially true in small business verticals.
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