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1、February 2023Navigating a New Normalin Business Travel&CommutesThe travel industry experienced plenty of stops and starts from2019 onward.We check in on the lingering effects of thepandemic and take a closer look at evolving traveler behavior.The travel industry was one of the hardest hit by the pan
2、demic,with lockdowns,quarantines,and work-from-home mandates keeping people off of publictransportation and flights.Business travel came to a halt,convention centers shuttheir doors,and public transit ridership took a dive as people became increasinglyaware of social distancing.And though travel beg
3、an to increase around July 2021,theswiftly rising inflation and cost of living upended the budding recovery.After manystops and starts,COVID-19 surges,and inflationary pressures,how has travelerbehavior shifted?This white paper digs into the foot traffic data to understand the implications of thesec
4、hanges.We looked at two categories of business travel frequent commutes,including transportation to and from the office,and more infrequent travel related toout-of-town business meetings and conventions.By analyzing visit trends to airports,public transportation hubs,convention centers,and offices,t
5、his report reveals howtraveler behavior has evolved over the past three years.With the pandemic fading inthe rearview mirror,we examine how business travel and commutes look in the newnormal and try to predict what lies ahead for the industry.The State of Business TravelTo get a preliminary sense of
6、 the changes to the business travel landscape over thepast three years,we analyzed four major travel sectors airports,trains and buses,convention centers,and hotels.Foot traffic to these segments had ups and downspre-pandemic,with airports and hotels showing fairly similar visitation trends,whilevis
7、its to convention centers and bus and train stations showed different patterns.However,all four sectors were almost identically affected by the pandemic,with foottraffic plummeting in early 2020.But these industries are rallying,for the most part,with some travel categoriesrecovering their pre-pande
8、mic foot traffic patterns while others still lag.Hotels haveseen the strongest recovery,with consistent summer visit spikes and only minordownward trends in the inflation-marked fall and winter of 2022.Similarly,airports 2023 Placer Labs,Inc.|More insights at placer.ai|2have seen their visits exceed
9、ing a January 2019 baseline for much of 2022.Like hotels,however,airports also saw their traffic slow in late 2022 as the ongoing inflation ledsome would-be travelers to opt for alternative modes of transportation.Buses and trains,meanwhile,experienced more dramatic lags in visit trends,as thepersis
10、tent shift to hybrid work kept many people from using public transportation asfrequently as they once did.The introduction of hybrid conferences which offerboth in-person and virtual attendance options also seems to have impactedconvention centers,which have also seen their visits remain stubbornly
11、below2019-levels.Commuting in the Post-COVID EraOffice occupancy was dramatically impacted by COVIDand the sector has been one ofthe slowest to recover its pre-pandemic foot traffic.While many speculated(orperhaps hoped)that post-pandemic,people would head back to the office five days a 2023 Placer
12、Labs,Inc.|More insights at placer.ai|3week,the reality has been far more complex.Convincing workers to give up on theirhybrid or remote work arrangements has been a hard sell,one that is reflected in visitdata from the Placer.ai Office Building Index.Across the country,both visits and visitfrequency
13、 are still significantly lower thanthey were in 2019 although the officerecovery is following different paths indifferent cities.The index shows that foot traffic to offices is still far lower than it was before thepandemic.Across the country,both visits and visit frequency are still significantlylo
14、wer than they were in 2019 although the office recovery is following differentpaths in different cities.2023 Placer Labs,Inc.|More insights at placer.ai|4San Francisco,CA,for example,saw an average of 71.0%fewer visits to its officebuildings in 2022 than in 2019,while visit frequency was 47.5%lower
15、for the sameperiod.In contrast,New York City,NY saw its office visits down by 44.4%year-over-three-years(Yo3Y:2022 compared to 2019).However,none of the analyzedcities have come close to exceeding their pre-pandemic visit patterns.Journeying Through the CommuteThe slow office recovery has significan
16、tly impacted workplace-adjacent businessesand services,including public transportation.With monthly visits to office buildingsremaining low relative to 2019,bus and train stations are also seeing their foot trafficlag behind pre-pandemic levels.As many commuters choose public transit to arriveat the
17、 office,the persistent Yo3Y public transportation foot traffic gaps are notsurprising and likely impacted by the overall slow pace of the office recovery.Traffic in downtown Chicago,image: 2023 Placer Labs,Inc.|More insights at placer.ai|5In contrast,gas stations and convenience stores,typically gea
18、red toward private carridership,show an entirely different trend.Aside from a minor dip during the firstlockdown-heavy months of COVID,the space has seen a dramatic growth in visits,with 29%more visits in January 2023 than in January 2019.This growth may indicatethat some people who chose to drive r
19、ather than risk a crowded subway car or busduring the pandemic have not yet returned to public transportation.The data mayalso mean that more people are using their car for recreation rather than commutingto work,which means more time to stop at convenience stores for snacks along theway to and from
20、 their destination.This fundamental shift in how often people go into the office and the rise in privatecar usage work in tandem to explain the slow recovery of public transportation.Mostpeople are going to the office less frequently than before the pandemic and whenthey do go in,many are potentiall
21、y choosing to drive rather than take publictransportation.2023 Placer Labs,Inc.|More insights at placer.ai|6Post-Pandemic Public Transit ChangesTo better understand just how much office commuting patterns have changed,welooked at traffic data from inter-and intra-city public transportation hubs in C
22、hicago,IL,Boston,MA,New York City,NY,Dallas,TX,and Washington,D.C.In all five cities,theshare of travelers arriving at the analyzed station directly from work has decreasedsince 2019.Pre-pandemic,24.7%of people arriving at the Ogilvie TransportationCenter in Chicago,IL one of the busiest commuter ra
23、il transportation hubs in NorthAmerica came directly from their respective workplaces.In 2022,that number was15.3%a 38%decrease.The share of travelers arriving at majortrain stations directly from their workplacehas decreased since 2019.2023 Placer Labs,Inc.|More insights at placer.ai|7Similar patte
24、rns repeated themselves in Boston,MA(from 23.1%in 2019 to 11.0%in2022),New York City,NY(22.5%to 13.0%),Dallas,TX(16.7%to 5.6%),andWashington,D.C.(16.3%to 8.6%),highlighting the decrease in workers at offices andtheir nearby transportation hubs.This could be attributed to employees embracing remote o
25、r hybrid work options or toa newfound preference for driving to work for those who now only have to make thetrip a few times a week.At the same time,some of the drop may be due to anincrease in office-goers stopping by a coffee shop or store on their way back to thetrain,as trips to the office might
26、 feel like a bigger outing now that most employeesare not going in as often.Transportation TransformationThe decrease in commuter travel is not the only change the pandemic has had onpublic transportation.Zooming into the captured market of major transportationhubs across the country shows that medi
27、an household income(HHI)of travelers tomajor commuter hubs was lower in 2022 than in 2019.(The captured market analyzesthe demographics of transportation hubs trade areas weighted according to the visitshare of the various census blocks making up the trade areas).This change in the median HHI of pub
28、lic transportation consumers may be due to thenature of different workplaces and their amenability to remote work.Manyhigher-paying,white-collar jobs are more easily done from home,while many serviceoriented jobs that require an in-person presence such as shift work in retail,foodservice,and hospita
29、lity tend to be lower paying.The increase in private car usagemight also be contributing to the decrease in the average HHIs of visitors to publictransportation hubs:Higher-income workers may have easier car access and lessconcerns about filling up the tank for their journey to work.2023 Placer Labs
30、,Inc.|More insights at placer.ai|8From Weekday to WeekendAlthough fewer office workers are using trains and buses to commute on a dailybasis,public transportation still renders a critical service although its function maybe shifting.2023 Placer Labs,Inc.|More insights at placer.ai|9Between 2019 and
31、2022,the share ofweekend visits to major train stationsacross the country increased dramaticallyBetween 2019 and 2022,the share of weekend visits to major train stations acrossthe country increased dramatically,indicating that many are now visiting thesetransportation hubs for recreational rather th
32、an professional purposes.Some citiesare already implementing schedule changes to adapt to the new normal inDecember 2022,New York Citys MTA announced plans to bulk up weekend serviceson some lines while making cuts to Monday and Friday services.The changes in office and public transportation visit p
33、atterns over the past few yearsreveal the new normal in commuting and urban travel.There is a decrease in foottraffic to office buildings and commuter hubs,but an increase in private car usage.Still,public transportation remains a crucial lifeline for many workers especiallylower-income employees as
34、 well as an important transit option for weekendrevelers.2023 Placer Labs,Inc.|More insights at placer.ai|10Grand Central Station in New York City,NY image:The Evolving Landscape of Conferences and BusinessEventsThe pandemic heavily affected business travel,with lockdowns and mandatoryquarantines ma
35、king traveling to conferences or business meetings extremely difficult.But convention centers have seen a resurgence of late,with some even expanding insize in anticipation of a conference comeback.Still,visit data indicates that foot trafficto convention centers is still lagging behind 2019 levels,
36、as a combination of hybridattendance options and tighter corporate travel budgets kept the space from makinga full recovery in 2022.So what lies ahead for the convention space in 2023?2023 Placer Labs,Inc.|More insights at placer.ai|11Convention centers have seen aresurgence,but foot traffic to conv
37、entioncenters is still lagging behind 2019 levels.The Evolution of the Business ConferenceThe height of the pandemic saw most conferences and business events going virtualas gatherings became impossible.However,as seen time and again,people cravein-person interactions and experiences leading to an i
38、nitial convention centerrecovery in the spring of 2021 as vaccine availability increased and air travel becameless daunting.By June 2022,the Yo3Y convention center visit gap had narrowed to14.6%,and in December 2022 the Yo3Y visit gap stood at just 14.2%.Still,looking atthe chart below also highligh
39、ts the persistent challenges in the space as of January2023,convention center traffic has yet to reach let alone exceed pre-pandemiclevels.2023 Placer Labs,Inc.|More insights at placer.ai|12This persistent visit gaps could be due to the increasing popularity of hybridconferences events held in perso
40、n with virtual formats that allow people to attendremotely and may indicate that a new normal has been reached in the space.Butthe stalling recovery may also be due to temporary setbacks related to the widermacro-economic situation,which is driving many large companies to reign in theirtravel budget
41、s until the current headwinds blow over.But some estimates predict that travel budgets may return to pre-pandemic levelssooner than expected,with much of that investments directed towards attendinglarger conferences and trade shows.It seems,then,that this year(2023)will becritical to determining whe
42、ther the lingering visit gaps are due to continuedchallenges in the space or whether convention centers like the office space haveentered a new normal.New York JFK airport(JFK),image: 2023 Placer Labs,Inc.|More insights at placer.ai|13An Electrifying Consumer ShowThe Consumer Electronics Show,the la
43、rgest technology show in the world,provides aglimpse into the evolving attendance patterns over the past four years.The show takes place every January in Las Vegas,NV and in 2019,the conferenceattracted attendees from all across the country.In 2022,however,the audience wassignificantly smaller,likel
44、y due to COVID surges and the option to attend theconference virtually.Where CES 2019 attracted 175,000 visitors,only around 40,000attended in 2022,with fewer attendees from rural trade areas.2023 Placer Labs,Inc.|More insights at placer.ai|14The most recent CES in January 2023 saw a modest increase
45、 in representation from awider range of locations,including North Dakota and Nebraska,compared to theprevious year.Attendance also increased,with around 100,000 people attending roughly 70%of 2020s numbers.Fly Less,Zoom MoreAnother noticeable shift in business travel is the decrease in the share of
46、frequentairport visitors.The share of individuals who visited airports at least five times peryear declined during the pandemic and was still below pre-pandemic levels in 2022.Much of this decrease in visits is likely due to the lingering effects of the pandemicand the ease with which people can mee
47、t virtually.But the decline can also beattributed to businesses looking to cut costs in a challenging economic climate.Ascompanies continue adjusting to a post-pandemic world and ramp up their travelbudgets in 2023,convention centers may well still make a full recovery.2023 Placer Labs,Inc.|More ins
48、ights at placer.ai|15Final DestinationIts easy to point to any one industry and highlight how the pandemic fundamentallychanged it.The“new normal”is still in flux,and the wide-ranging world of businessand everyday travel has not entirely found its equilibrium.Sweeping shifts in behaviorhave affected
49、 how people get to work,the time of day they travel,and whether theychoose to attend meetings and conferences in person or not and these changes arenot set in stone.As seen over the past few years,consumer behavior tends to shiftalongside new changes,whether driven by economic factors or health conc
50、erns.And perhaps the way forward is through adapting and making the best of the newnormal.New York Citys MTA shifted its train schedule to better accommodateincreased weekend travel,and the CES show continued in the hybrid format itdebuted in 2021.By embracing change and finding innovative solutions
51、,travel canthrive under this new reality.Key Takeaways1.Foot traffic to major transport categories is rallying but not fully recoveredjust yet.Hotels and airports were heading towards a full recovery,but visitgrowth slowed as inflation took hold.Meanwhile,public transportation andconvention centers
52、have taken longer to catch up to their pre-pandemic foottraffic,likely driven by the popularity of remote work and hybrid conferences-though overall recovery trends for both have been significant.2.The change in office work has had wide-reaching impacts on travelerbehavior.The availability of remote
53、 work has impacted major commuter hubsnear office blocks nationwide.Foot traffic to bus and train stations is still around20%lower than pre-pandemic levels,and an increase in visits to conveniencestores and gas stations suggests that many are choosing to travel by carpost-pandemic.2023 Placer Labs,I
54、nc.|More insights at placer.ai|163.People are using public transportation more recreationally.The share ofweekend visits to major train stations across the country has increaseddramatically while the share of weekday visits have gone down,suggesting thatmany are using trains for recreational purpose
55、s instead of for a work commute.4.2023 will be critical to the convention center recovery.Convention centershave seen a marked increase in foot traffic from the height of the pandemic.Butthe foot traffic recovery has stalled through much of 2022,likely due to acombination of an increase in virtual and hybrid events and tighter corporatetravel budgets.As many companies ramp up their travel budgets this year andfocus spending on larger events,this year is likely to be critical to the conventionspaces recovery story.2023 Placer Labs,Inc.|More insights at placer.ai|17