The industries set to drive domestic business travel bounceback

Tom Walley, General Manager, Corporate Traveller Australia

As Australia’s major economic contributor, providing around 7 million jobs and 57% of GDP, SMBs will drive the post-lockdown recovery of multiple sectors, including travel.

As Australia anticipates a fall in community transmissions and easing of restrictions through the Federal Government’s Four Phase Plan, the country’s only dedicated travel manager for SMEs has forecasted which industries and routes will drive the business travel market recovery.

Corporate Traveller’s market analysis

The forecast is based on a substantial volume of bookings released by Corporate Traveller Australia Flight Centre Travel Group’s business travel solutions provider for SMEs.

Corporate Traveller analysed a sample of nearly half a million bookings across more than 2,000 companies in the healthy domestic travel period between 1 February and 20 June 2021.

The data reveals the top five industries performing best in current conditions are the medical, mining, construction, engineering, and manufacturing industries, while routes between Sydney, Melbourne and Brisbane will see the largest recovery as the states re-open.

Mining and healthcare continue to perform strongly in the global pandemic because of the essential nature of the travel – especially when it comes to intrastate travel within states.

According to internal data, industries such as service, manufacturing, IT, Government and financial and insurance are currently the most subdued in terms of business travel and are set for the biggest bounceback once restrictions ease across the country.

Just as in the February-June travel market, Corporate Traveller expects the medical and mining industries to take the largest proportion of business travel flights when restrictions ease.

These industries are important to Australia’s overall economic recovery. Mining contributes around 11% to Australia’s GDP, and the ratio of health spending to GDP is around 10%.

Travel by the medical industry made up 11% of all business travel earlier this year, with Melbourne to Sydney the industry’s most popular route, while mining accounted for 10%, taking most trips between Perth and Kalgoorlie.

There are often several people who fly for business, some regularly and some occasionally.

People that travel within the medical and mining industries is a large part of the contribution these sectors would make to the bounceback. Before the lockdowns, an average of 43 people per medical organisation and 38 people per mining company would travel for business.

Construction and engineering will also help drive the business travel bounceback, as they were the next most travelled industries before this year’s lockdowns.

Until late June, the construction industry accounted for 9% of business travel among Australian SMEs, and engineering was responsible for 6%. Both industries fly an average of 30 people per organisation, and travel to Brisbane will be the most popular route for these sectors.

The construction industry comprises around 395,300 businesses that employ more than 1.15 million people. Construction (with civil engineering) contributes around 9% to Australia’s GDP.

Corporate Traveller expects the manufacturing industry to also contribute strongly to the bounceback. This industry made up 6% of business travel before this year’s lockdowns, with Melbourne-Sydney the most popular route.

Australia’s manufacturing sector comprises around 104,000 businesses that collectively employ around 908,200 people and contributes around 6% to Australia’s GDP.

Consultancies, technology companies, travel companies, transport and finance companies will be responsible for a quarter of the business travel bounceback, based on the 23% of all business travel bookings they collectively made before the latest lockdowns.

“Not only are Australia’s SMEs vital to the health of the economy, but it would be wise to look to our SME sector for signs of recovery in most markets – including domestic business travel,” said Corporate Traveller Australia General Manager Tom Walley.

“The travel period between 1 February (after holidays) and 20 June (before Sydney’s lockdown) was as near-normal as Australia had ever been since the start of the pandemic.

“It is why Corporate Traveller looked to this travel booking period to make a post-lockdown forecast. Our data is reflective of the overall SME travel market, based on our large numbers.

“We are fortunate that most Corporate Traveller customers are in ‘essential’ industries that need to continue travel to keep Australia running. For this reason, our bookings for essential travel have always remained relatively strong.

“We expect these industries to drive the return to domestic travel as governments continue to drive job growth through building and infrastructure investments, and policy.”

Most popular routes

According to the Corporate Traveller booking data, Mr Walley expects flights resuming between Sydney and Melbourne, Sydney and Brisbane, and Melbourne and Brisbane to make up the largest overall return a combined 19% to domestic business travel.

“We expect flights between Sydney and Melbourne to see fastest and largest return to travel. Earlier this year, this route made up 9% of our SME travel,” he said.

“Flights between Sydney and Brisbane will also come back strongly, with this route making up 6% of business travel previously, while flights between Melbourne and Brisbane made up four per cent of all business travel.”