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When COVID-19 hit, business travel virtually ground to a halt. As borders begin to re-open, there are key considerations for business owners before sending employees away.


Up in the air: business travel post-COVID


Globally, US$1.33 trillion was spent on business travel in 2017, with 5.8% annual growth. Of that total, Australia accounted for US$23.5 billion, with 6.6% annual growth. Then COVID-19 hit.


By April 2020, the Global Business Travel Association (GBTA) noted that 99% of business travel by European companies had been cancelled or postponed. Around the globe, the business travel industry was anticipated to take a £655 billion revenue loss from March 2020. Here at home, the Australian Government severely restricted international arrivals and imposed strict quarantine rules for travellers, while each state and territory introduced its own border controls. Except for essential workers, travel practically ceased.


Businesses quickly pivotted from face-to-face meetings and events to virtual platforms such as Zoom and Microsoft Teams, online training, virtual tours, teleconferencing and webinars. A GBTA survey found 70% of companies had developed contingency plans involving teleconferences and video meetings to ensure work progressed in the COVID-19 period.


For many businesses, the efficiency, time-savings and cost-effectiveness of going digital was a revelation and means they may never return to the same level of business travel. A survey from JLL found over two-thirds of global firms in Asia Pacific intended to permanently limit business travel, while more than half of the respondents in a survey of Fortune 500 chief executives showed trips would not return to pre-COVID levels. In Australia, 53% of businesses anticipated that when the country opens its borders and travel returns, fewer contracts or deals would require in-person meetings, according to the 2020 Global Traveller Report. It also found 96% of ANZ business travellers expected long-term changes to business travel post-pandemic.


For other businesses, the inability to be on-site has been more challenging. The same survey revealed one-third of Australian businesses expected declines in new business due to a lack of in-person meetings. The ability to meet in-person, read body language and nuances in speech, and see things for themselves can be invaluable when building relationships, hashing out the fine details of a deal or understanding how a business works. It can also make financial sense, with a study from Oxford Economics finding for every dollar spent on business travel, $12.50 in incremental value resulted. A Flight Centre survey found 43% of business travellers cited ‘winning new business’ as the most significant driver of a return to travel, closely followed by ‘client relationship management’. As such, many businesses eagerly await a return to travelling in the years ahead (experts predict business travel may take between one and three years to resume).


When business travel does start up, companies will need to ensure they meet their duty of care to keep workers safe. Travel risk management will be paramount, and the proper procedures and travel policies will need to be in place and understood. Key considerations include:

  • Re-assessing business travel

There will be a need for more stringent due diligence to assess the need and purpose of travel. Does technology exist that reduces the need for in-person meetings? What are the alternatives to travelling on-site?

  • Reviewing travel policies

A survey by Flight Centre found 69% of organisations said they are likely to tighten health and safety policies covering staff travel due to COVID-19. Management should consider revising the company’s duty of care and travel compliance policies. Under what circumstances can which employees travel to what destinations using what type of transport, staying where and for how long?

  • Meeting obligations

The business also needs to consider how it will meet any restrictions or obligations, such as quarantining or testing, imposed by governments. Contingency planning is essential.

  • Providing information to travellers

The trip itself is now considered the most stressful stage of travel for 45% of business travellers surveyed in the Global Traveller Report. It found 97% of travellers want their organisation to adopt measures such as personal health screenings, real-time updates on travel risks, and limiting travel to only business-critical trips. The report also revealed 93% of ANZ business travellers would like company training on how to protect their health and safety during travel, how to maintain healthy habits while travelling, and travel best practice. To reduce stress, businesses should implement measures that employees consider necessary to resume travelling such as improved traveller safety information, requiring pre-trip approval and a greater ability to quickly change travel plans.


Another key consideration for business is travel insurance. When the World Health Organization declared COVID-19 a global pandemic, travel insurance policies were impacted. While corporate travel insurance policies that were taken out or renewed before COVID-19 became a listed disease are likely to provide cover, since the pandemic was declared (2020-31 Jan) most insurers have placed a specific exclusion on losses associated with the outbreak.


According to travel insurers, the availability of cover will play a critical role in giving travellers the confidence to pack their bags. To this end, insurers are looking to adapt their products to better suit the changing needs of travellers globally.


With the safe travel zone with New Zealand set to come into effect, international travel may make a tentative return. In response, a couple of insurers have introduced new travel policies offering cover for COVID-related claims such as:

  • cover for medical costs, border closures, quarantine costs
  • refunds for cancellations made by essential workers whose leave is cancelled due to the pandemic
  • travellers being placed in quarantine and not able to travel
  • a relative or business partner in ANZ contracting COVID-19 and is in a life-threatening condition
  • accommodation is cancelled due to a deep clean
  • or holiday activities are cancelled due to COVID-19.

The insurers expect to extend the cover to other overseas travel destinations once official ‘travel bubbles’ are agreed and announced by the Australian Government. Corporate travel policies will also need to address COVID-19 related matters to provide employers and employees with the confidence to resume business travel.  


Business owners should talk to their EBM Account Manager about the Corporate Travel insurance products available and review any restrictions in cover in the ongoing COVID-19 climate.


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