At the beginning of the pandemic I argued that the naysayers were wrong – we would not social distance forever, and a vaccine would help bring back travel – but business travel would still never fully return.
We’ve incurred the one-time cost of transitioning to online work, and it turned out better than many expected. There’s been a return to office but it won’t fully come back. And some meetings really can be done over Zoom, even if it isn’t the same thing as in-person.
People are no longer afraid of Covid-19, in the limit. Domestic travel boomed this summer. Restaurants filled up. But office towers did not.
Some companies wanted employees back to work, but it usually wasn’t every day. There have been fewer meetings in offices because the people you’d meet with aren’t always there. And when they’re in the office, they often take meetings with other people in the office over Zoom (or, heaven forbid, Teams).
There’s an equilibrium developing where substantially more jobs are done from home than before the pandemic. We aren’t going fully back to office.
The shift to WFH is the largest shock to labor markets in decades. Pre-pandemic WFH was trending towards 5% of days by 2022. Now WFH is now stabilizing at 30%, a 6-fold jump.
In America alone this is saving about 200 million hours and 6 billion miles of commuting a week. pic.twitter.com/XK4WVWXq3f
— Nick Bloom (@I_Am_NickBloom) August 29, 2022
Back to work numbers will grow a bit more. Some companies plan return to office post-Labor Day. Right now people prefer work from home but a recession and rising unemployment could shift the balance of negotiating power to companies who want employees working from an office. Yet work from home will remain substantially higher than it was before the pandemic.
People who work from home will travel to a big company retreat once a year. They may go to a conference, take a business trip, but many won’t be on the road the way they once were.
There’s a new kind of business travel, commuting occasionally from remote work to the office instead of taking the train or the freeway. But office towers are going to take a long time to fill back up because there’s a new equilibrium where not as much office space is needed per worker as before. And that’s going to mean some business travel that used to happen just won’t.
Eventually total business travel numbers will grow beyond what business travel numbers used to look like because of the pandemic, the result of compounding growth, but we won’t be as high as we would have been without this exogenous shock.