Excerpt from GlobalCapital
Twenty months after international business travel came to an abrupt halt, it is starting up again. But bankers say there are several reasons why they will not be racking up the same number of air miles as before the pandemic.
For one thing, the fact that cross-border transactions have been executed perfectly well without anyone getting on a plane for almost two years shows that it can be done.
Issuers and banks that have saved on the cost of travel will therefore be asking themselves whether it is worth the expense to send bankers and management teams around the world quite so much.
Then there are the sustainability concerns. In an era when environmental, social and governance investment criteria are at the forefront of everyone's minds, people are also considering the carbon emissions of all those flights.
For some, the pandemic has thrown the excesses of the past into sharp relief.
"Getting on a plane at seven in the morning to go wherever, you name it — Stockholm, Copenhagen — for one meeting, to turn around and fly home again, is a total waste of time," said a former banker who is now a recruiter. "And it used to happen every day!"
In GlobalCapital's recent working life survey, respondents on average predicted that just over 55% of business travel would return after international travel restrictions were lifted, using 2019 as a benchmark.
Nevertheless, people working in the capital markets still see travel as an essential part of their jobs, even if it will be dialled back compared with the pre-Covid era.
One key business route reopened on November 8, when the US lifted restrictions that had prevented non-citizens from visiting the country from Europe since March 2020. But more than a month before, at the end of September, the resumption of travel was demonstrated at the Global ABS conference in London, one of the first physical events to take place since the beginning of the pandemic. Attendees flew in from Amsterdam, Frankfurt, Dublin, Jersey and even Chicago. Shortly after that, Bank of America started to allow international travel for "important client-driven business" as long as it complied with local rules.
Bankers have identified three main reasons why business travel, especially of the long haul variety, will not return on the same scale as before the pandemic.
"Certainly we are not going to come back to the level we had beforehand," said a senior syndicate banker in London. "There are three levels: Firstly, the system has proven that you can work differently; secondly there is the ESG angle; and thirdly there is the cost component. I think they are all interlinked. But I wouldn’t necessarily say one should go to the extreme and say the business doesn’t need any face to face meetings and therefore doesn’t need travel."
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