Business travel woes are exposed as Amazon saves nearly $1bn in travel expenses

In the early stages of the pandemic, Amazon told its more than one million employees to avoid all non-essential travel in the US and internationally due to concerns surrounding health and safety. Credit: Sundry Photography / Shutterstock.

Amazon has saved almost $1bn on travel expenses in 2020 due to the coronavirus pandemic and the significant reduction in this type of business cost is not just exclusive to multinational tech juggernauts, leading to questions regarding how long it will take for business travel to recover.

In the early stages of the pandemic, Amazon told its more than one million employees to avoid all non-essential travel in the US and internationally due to concerns surrounding health and safety. According to GlobalData’s Week 9 Covid-19 Recovery Survey (fieldwork undertaken 7-11 October 2020), 80% of US respondents were either ‘quite’ or ‘extremely’ concerned about the global outbreak of Covid-19 and 61% were either ‘quite’ or ‘extremely’ concerned about their physical fitness and health as a result of the pandemic.

This level of concern from US citizens shows that Amazon acted responsibly in its reaction to the pandemic by postponing corporate travel, keeping employees on the side, demonstrating a caring attitude and saving a significant amount on costs.

Companies are realising what can be gained without business travel

Without the Covid-19 pandemic, the vast majority of companies across all sectors involved in corporate travel would have not realised the amount of capital that could be saved and the worthiness of video conferencing technology as a valid substitute.

According to a live GlobalData poll, 53% of business owners and executives would not send their employees to attend an overseas MICE event in the next 12 months. This reluctance from business owners / executives will be a mix of wanting to save costs in order to navigate the pandemic successfully while also wanting to maintain organisational commitment from employees. Workers will likely appreciate the company they work for if it shows that it cares about employee welfare.

According to the 2019 Goldman Sachs Sustainability Report, the company attributed 135,000t of carbon emissions last year to its business travel, of which 83% was generated by commercial airline flights. This vast amount of corporate travel undertaken by multinational banking companies would have been cut in 2020, helping the financial services sector to save on a historically high cost amid the pandemic.

This vast reduction in airline flights also helps companies to meet sustainability goals, which are becoming increasingly important. This may be another reason why business travel may not reach the levels it was at pre-pandemic.

Business travel will recover, but to what extent and how long it takes remains to be seen

CFO of Amazon – Brian Olsavsky, said that internal travel expenses will likely resume ‘at a later date’, but they may not rise to the same level that they reached in the past. This mindset may be emulated by many multinational companies that have found corporate travel to be useful pre-pandemic. When companies and their employees are prepared to return to international business trips, demand will be likely to return in phases. Small meetings and essential business operations will return first, while large-scale exhibitions and international trade fairs are likely to be the last to return.

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