COVID-19 has forced multinational companies to abandon their business travel plans and conduct all of their networking operations entirely online. But many experts are arguing that business travel, while it can be scaled back, can never be entirely eliminated.
Several arguments are being made in favor of keeping business travel around in some capacity.
One, there is a direct correlation between company growth and the amount of money spend on international travel. When workers and executives get to travel, they get to transfer knowledge and resources in different parts of the world. It’s an on-the-ground advantage you can’t get with Zoom meetings.
Second, you can only network with so many people when business is being done on the Internet. A conference allows to simultaneously interact with multiple people at once and have deeper conversations. Conversations which can lead to discovering new resources and closing crucial deals for business growth.
Third, as the aviation industry makes a comeback, companies who start traveling and offering in-person services will have a competitive advantage. Other companies will have no choice but to eventually follow suit if they want to keep their positions as industry competitors.
As for which industries will be the first to resurrect business travel, the answer is fairly straightforward: Any industry with a near-exclusive reliance on production and hands-on activity (pharmaceuticals, construction, etc.). Those who can operate 100% online (finance, technology) will be the most hesitant to resume travel.
I can’t say how soon business travel will start to become a normal part of corporate life. Considering that many airlines don’t see a full recovery to pre-coronavirus times happening before 2023-2024, don’t expect it to be too soon.
But everyone, whether traveling for business or pleasure, is desperate to get back on a plane. The sooner it happens, the faster we can restore the world economy to its former glory.
What are YOUR thoughts on business travel – an essential activity, or a useless expense? Reply to this newsletter and let us know!
The Hilton in New York City’s Times Square Is Officially Closed!
If there is any place in the world where a hotel chain would want to have a location, it’s Times Square in New York City. Even a brain-dead idiot will know why it is imperative to set up business in one of the world’s most valuable pieces of real estate.
Of course, that’s assuming you can actually afford to set up shop there. It’s also one of the most notoriously expensive real estate locations in the world – gotta pay to play!
Hilton Hotel Corp. is one of the companies who can no longer afford to be there, citing financial difficulties. As a result, October 1st marks the date when their 478-room, 44-story hotel in Times Square will be officially shut down. This announcement is a pre-emptive 30-day warning to the 200 employees who are about to be laid off.
While this location is within walking distance of all the sights you would want to see in downtown Manhattan, nothing is happening right now. Virtually all of the entertainment options are shut down until 2021, and travel restrictions would prevent most tourists from just booking a room.
Sad news, but every hotel in NYC is facing turmoil. To go from 93% occupancy to 38% occupancy in just one year is a devastating financial loss, especially when 50% occupancy is what most properties need just to break even.
In Paris, Teenagers Under 18 Can Ride the Bus (or Train) for FREE!
One of the major problems with public transportation in Canada and the United States involves ridiculous fees. The rates just seem to keep on increasing to ridiculous levels, forcing low-income people to a hard decision between traveling to work and having 3 meals a day.
But this month, young students in Paris no longer have to ask their parents for change to ride the bus or train. If said students apply for an annual transit pass within 5-6 weeks, the cost of the pass will be 100% reimbursed.
While this decision ties in perfectly with the start of the new school year, Paris has spent the past two years transitioning towards this point. They started off with low-cost options for seniors and kids, and it appears to be part of a larger plan where the entire transit network is 100% free for all 2.2 million people residing in the capital of France.
Several smaller cities in France, along with countries such as Estonia and Luxembourg, have also been working towards a fully free public transportation system for its inhabitants.
I understand the move is only possible because we’re dealing with a smaller city here, which is why it likely won’t be a reality for people living in North America. And considering that this move is being done during a worldwide financial recession, you have to wonder how this move will be monetarily sustainable over several years…
4 Million People Made It Through the Closed US-Canada Border So Far
It seems as if the border between Canada and the United States will be blocked off to non-essential travel for the rest of 2020. The closure of the border started on March 21st and its expiration date keeps being pushed back every month or so.
But that hasn’t stopped people from attempting to get through. Although 18,000 people have been turned away so far (16,000 were American citizens attempting to enter Canada), a total of 4 million have reportedly been successful in crossing the border.
How could this happen? There are numerous explanations at play…
There are quite a large number of people who can cross the border for special reasons. We’re talking about Canadian citizens, those with dual nationality, international travelers seeing immediate family, international students, or workers belonging to “essential” sector (provided they all self-quarantined for 14 days upon returning).
There’s also the “Alaska loophole,” where people will claim they can only work or return home if they can reach Alaska. This is both illegal and heavily frowned upon, with numerous stories published of people who have been caught doing so.
You can take people out of travel, but you can’t take travel out of people.
Have YOU tried to cross the border, or know somebody who successfully has? If so, how did you (or they) do it? Reply to this newsletter and let us know!
What Will Cruise Trips Look Like When They Sail Again?
Cruise line companies have faced challenge after challenge this year. Whether they are unable to set sail for the rest of the year, or have to deal with bankruptcy and unsustainable daily cash burn, everyone in the industry is hurting.
But time off can be used productively to innovate how things are done and provide returning passengers with a fresh new experience. Amongst several big names such as Norwegian and American, here are some of the changes you can expect to see:
- Reduced passenger capacity and encouraged social distancing within onboard activities
- Touchless temperature checks
- No more “self-serve” options for food and drinks (goodbye, buffets!)
- More crew members, especially those in the medical profession
- New disinfecting procedures for high-touch areas (railings, doorknobs) and passenger luggage
- Complimentary personal protective equipment for staff and guests
- Installation of filters to eliminate more airborne pathogens
Quite the long list! But such is the sacrifice needed to assure passengers that hopping on a large boat for several days or weeks at a time is both safe and fun.
I don’t know about you, but I’m quite excited to see the cruise line industry prosper in 2021 and beyond…
Should You Be Investing Into Cruise-Line Stocks Long-Term?
Now, I did say I was excited about how cruise lines will change the passenger experience. But INVESTING my money into the stocks of cruise line companies is an entirely different matter.
Remember that all of the stocks for cruise line companies sunk to the ground since the start of the pandemic. With the assumption that most of them will resume some degree of normal activity in 2021, it will be at least another 1-2 years before any of the big names become profitable again.
And should they return to the land of the green, exactly how profitable will they be? Many experts predict that 2019 levels of profitability won’t come back until 2024 at the earliest.
It’s entirely possible for cruise line stocks to become the money-makers they once were. Just don’t expect it to happen until 3-5 years from now. It may be worthwhile to get into them now while they’re cheaper, but don’t expect overnight gains. Only the most patient of investors should consider going down this path!