The return of the business traveler is eagerly awaited in the empty halls of meeting and business hotels across the U.S.

But there is of course not just one type of business demand. This article takes a more-nuanced look to gain insights into what could happen and by when.

One saying attributed to the Boston Consulting Group is that “life is a two-by-two matrix,” and in that vein business travel demand can be segmented into four parts: transient and group, internal and client-facing.

Here are what the corresponding four demand patterns could look like in 2021 and 2022.

Think about this as the internal small group or individual traveler flying to headquarters from their regional outpost for an engineering brainstorm or a quarterly sales review.

In 2020, these meetings all took place online, and pretty effectively at that. The sessions were likely conducted by participants who had shared history and procedures, so moving the meeting online was, after initial hiccups, quite seamless. When business travel resumes, the travel expenses that were saved will outweigh the benefits of meeting in-person, and these meetings will stay online for the foreseeable future, without need for hotel rooms.

The exceptions to this are the cases where new hires need to be onboarded or new teams need to form — in other words, where there is no shared history or culture. In those cases, the individual, internal-facing travel will still be the best way to accomplish the goal.

Hotel demand from internal-facing transient travelers will continue to be small.

You've probably heard this quote by now: “The day when you lose a sale because your competitor met with the client in person while you were only online is the day you start traveling again."

In other words, competitive pressure will move salespeople and account managers back on the road to see those clients who allow them to come into their office.

For regional companies within drive-to distance of their major clients, these trips are likely already ongoing. The TSA checkpoint counts seem to suggest there are quite a few midweek flyers, most likely on the road for business. Traveling and staying in hotels always has and always will be part of the cost of doing business, and this part of the hotel demand will return quickly once vaccinations are widespread among the business travel community.

Hotel demand from client-facing transient travelers will continue to recover well.

Online meeting technology has improved so rapidly over the last year, and as a result, large internal meetings such as quarterly “all hands” meetings are now also conducted online. Over time, the need to continue to forge teams and build and rebuild culture made corporate decision-makers realize that the travel cost savings may have come at the expense of team cohesion, and so in-person meetings will resume.

Even after vaccines have been widely distributed, there is likely going to be a lingering fear by internal meeting planners of hosting the next “super-spreader event.” So, it may not be considered prudent to have all members of your East Coast sales organization in one ballroom in Orlando at the same time, for example. The outcome of this may be multiple smaller meetings, or rather hybrid meetings that have a strong online portion to allow interactions for people in and out of the hotel meeting room. This will likely have a small negative impact on room demand.

On the positive side, some organizations that shifted their workforce to “work from home” or “work from anywhere” may call monthly or quarterly meetings for their remote staff to get together and meet, but also to break bread and get together socially to fortify team spirit. Meetings and conversations that happened in the office around the watercooler now have to be organized around places and times when people get together in person. This could have a small, incremental positive effect on room demand.

Hotel demand from internal-facing group travelers will likely continue to be subdued, but hotel meeting room technology needs are expanding.

“Safety first” will be the mantra before and when we collectively attend large conventions again. While most large group meetings moved online successfully — from a content perspective — anecdotally sponsors were less than enthralled with the interactions that they paid so dearly for. For the conferences to work, sponsors need to pay willingly, and that means that attendees must be physically present and walk by the sponsor booths.

Let’s face it: For a lot of us, attending the conference is not as much about the breakout sessions but rather about the deal-making in the hallways and the cocktail party conversations. Those interactions will make business travelers want to leave their home office and take a trip once it is safe to do so and their travel departments give the go ahead. Room demand impact is clearly positive, but the speed at which CEOs and travel managers will allow their teams back on the road will vary widely.

Hotel demand from client-facing group travelers will grow, but slowly.

The STR forecast suggests that after Labor Day 2021, corporate travel should return in earnest, spurred on by transient travelers and some group demand. The record-breaking results of 2019 are still the benchmark to achieve but, given the trends laid out here, will remain elusive until 2023 and beyond.

Jan Freitag is the senior vice president of lodging insights at STR and national director for hospitality market analytics at CoStar.

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