These latest company budgets and stricter travel programs are concrete evidence that there's simply no going back to 2019 levels.
Two global consultancies are about to pare down their business travel to an absolute minimum for the post-pandemic future.
This absence of future corporate travel from the two companies won’t be welcome news for airlines and hotels, as there’s up to a potential $900 million disappearing from their combined budgets. These cutbacks echo findings from Deloitte’s recent travel manager survey that predicted a slower recovery compared to bullish outlooks from the aviation sector.
A look at the numbers: Cognizant has 300,000 employees, and before Covid spent between $250 million and $300 million on air travel alone, according to Drew Mitchell, its regional travel director for the Americas.
Capgemini, meanwhile has 250,000 employees, of which 80,000 used to travel worldwide. In 2019 it spent $600 million on travel, said Katharina Navarro, its global category manager travel.
The figures, revealed by the pair during a two-day WIN Global Travel Network and Hickory Global Partners virtual event, are still way off from Amazon’s own budget — it said it saved nearly $1 billion in corporate travel, internal travel, and travel expenses in October last year.
But around that period, most travel managers would have been reluctant to predict future travel volumes or patterns. Now with borders and offices reopening, there’s more clarity.
Cognizant has decided to continue its travel ban for the rest of the year.
“We found our sales teams and client teams have been very successful at virtual presentations,” said Mitchell. “We’re going to try and continue that.”
Starting in the first quarter next year, the company will introduce a pre-authorization requirement for all travel, which will be tied to budgets. “Right now, behind the scenes, we’re building the travel approval form, and code, and getting ready for it,” he added. The move could end up being similar to Pfizer’s own efforts to clamp down on travel.
In some way, Cognizant’s consultants will already be used to this, as during the pandemic the company only allowed travel that had been signed off by its executive committee. “You don’t really want to send your travel request to them, so there really is not much travel,” Mitchell joked.
At Capgemini there’s talk of a cap on travel, with further reductions due to corporate sustainability plans. Navarro said the company will also question the need and return on investment of every single trip, and will be starting next year with a “zero-based” budget approach.
“It came as a bit of a positive shock to see that we can do so much digitally, and that we can not only win new clients, but deliver full end-to-end projects on a virtual (basis),” she said, during the second day of the event. “It’s really a new proven concept.”
There’s also guidance from the CEO that the company will cap travel at 50 percent of 2019 levels, Navarro added, while employees may need to “bundle” several reasons for their travel in the future, rather than attempting to book a flight just for a single meeting.
Photo credit: Fewer consultants will be traveling in the future. LinkedIn Sales Solutions / Unsplash