By Daniel Craig
Here we are at the start of 2023, and it’s almost time again for ITB Berlin.
It’s a long way to travel from Vancouver for me, so I usually make a larger trip out of it, visiting clients in cities across Europe.
But this year I can’t help but wonder, will there be any clients to visit? With so many people working remotely these days, many offices are running on skeletal staff or have shut down completely.
Enabled by technology and precipitated by the pandemic, the remote-working trend is one of the biggest shifts in business demographics we’ve seen in decades. And the hotel industry has yet to see the full impact.
How many other business travelers will face a similar dilemma to mine in 2023? And how many will decide—or their employers will decide for them—to spare the expense and hold a few Zoom calls instead? Empty offices provide another hurdle to business travel, joining a growing list of concerns related to tightening budgets, inflation, the pandemic and concerns about the economy.
At the Hotel Data Conference in August, Jan Freitag of STR reported that business transient travel has been the slowest segment to rebound since the start of the pandemic. He speculated that this segment may have permanently shifted, citing a correlation between office occupancy and business travel.
“Traveling for business becomes a moot point if there’s no one in the office to travel to,” he remarked.
While a lot of workers have returned to the office and others have shifted to a hybrid work model, the average global office occupancy rate was only 22% in Q3 2022. The data indicates the “solidifying of new patterns in the post-pandemic era,” according to Basking.
Translation: remote workers won’t be flooding back to offices anytime soon. And why would they? All kinds of surveys show that employees who work from home are happier, less stressed, more productive, and more loyal to their employer than office employees.
While the trend is sure to affect business trip decisions at the individual level, it’s not all bad news for hotels. An offshoot of the work-from-home (WFH) trend is the work-from-anywhere (WFA) trend. Now that most pandemic travel restrictions have been lifted, a lot of workers are discovering that even better than working from home is working from an exotic or vibrant destination. With a laptop and a good internet connection, people can work from virtually anywhere these days—on the beach, in the mountains, in city cafés, bars, and coworking spaces, and in rented homes and hotels.
With more people than ever freed from the shackles of the office, there has also been a boom in workcations, digital nomadism and, perhaps most significantly, bleisure or blended travel—the combining of leisure and business activities on the same trip. According to a recent global study from Google, 74% of business travelers find the idea of blended travel appealing and 50% of travelers have already taken a blended trip.
Changes in traveler behavior are shifting hotel occupancy patterns. According to STR data, the largest occupancy gap to pre-pandemic 2019 levels in the U.S. is in urban locations and in the middle of the week, when business travel is traditionally most frequent. Meanwhile, shoulder days—Sundays and Thursdays—have recovered almost as rapidly as weekends.
Shifting travel patterns could also boost demand during shoulder and off-seasons in some destinations — a phenomenon we’ve already seen due to overflowing leisure demand in high season. And a surge in demand for small meetings and events is expected in 2023, in part driven by companies looking for ways to build relationships, teamwork, company culture and professional development among remote workers.
Hoteliers would be wise to adapt to the trends. This means targeting work-from-anywhere travelers, catering to blended trips and longer stays, and reimagining spaces to better accommodate work-from-hotel activity, coworking, and small meetings. It could also mean targeting sectors with a high proportion of remote workers—like technology, communications, professional services, finance and insurance, according to Gusto—and offering up the hotel as a place to gather, interview, orient, train, and develop remote workers.
For many, like me, working from home has made business travel even more important and meaningful. So I’ve decided to go to ITB despite the drawbacks. But it will be a quick trip — to Berlin and back, with no stops in my usual haunts.
How many other business travelers will make similar decisions in 2023?