Some of the biggest banks in Europe are mulling a cut in business trips post-pandemic by as much as 50 percent, Financial Times reported.
The decision stems from the success during the global COVID-19 pandemic of conducting business remotely, saving banks time and money. The move also is seen as a benefit to the environment as banks and other businesses move to reduce their carbon footprint.
Senior officials from several banks in the U.K. and Britain told FT they expected to make some trips this year, but 2020 has shown that much of the travel was unnecessary.
“I think people don’t see the point of doing everything they were doing before,” said one senior investment banker. “Flying out for a one-hour meeting and coming back, for instance. These things will disappear.”
By maintaining the remote-work momentum gained during the pandemic, banks said they will save money at a critical time when financial institutions are fighting for profits amid low-interest rates, according to FT.
For example, HSBC told FT it saved $300 million on corporate travel overhead in 2020 compared with 2019. The business travel cutback last year also cut the bank’s annual CO2 emissions by about 73,000 tons.
If the U.K.’s biggest banks cut travel in half compared to 2019, it would generate an estimated annual decline in CO2 emissions of 120,000 tons, according to FT calculations.
While a reduction in business travel is a plus for banks’ bottom lines, it will add to the financial strain the hospitality industry suffered during the pandemic’s grounding of flights. Business travel can generate up to 75 percent of airlines’ revenues on some international flights, according to PwC, per FT.
Andy Halford, chief financial officer of Standard Chartered, told FT it anticipated that travel will be about one-third lower than pre-pandemic.
“Meetings with investors to do updates, roadshows around the world, I expect those things will reduce. Many investors can get just as much out of it on video. But town halls with a lot of staff, important executive meetings . . . that will need to continue. The morale impact is worth the effort,” he said.
Estimates from the International Air Transport Association (IATA) indicated that it didn’t anticipate business flights returning to pre-pandemic levels until 2024. Although the GDP and air travel have correlated historically, IATA surveys show this link has weakened regarding business travel.