Since the pandemic has changed the way people think of business travel, large U.S. airlines have been thinking of new travel types that could replace it. Delta has spoken of the premium leisure passenger, or people that will pay for a nicer onboard experience and an upgraded hotel and ground package. Other large U.S. airlines have spoken of the “blended passenger”, or some say the “bleisure” passenger. This supposed growth category includes people whose travel includes some business and some leisure.
It’s understandable why the big U.S. airlines would look for this kind of traffic. Faced with business traffic levels stuck at about 75% of 2019 volume, this loss of revenue would be sizable for the three largest U.S. carriers. Corporate travelers have historically paid three to four times that of the discretionary, price-sensitive traveler. Even a 10% loss of business traffic volume would mean that airlines don’t have enough seats to make up the revenue with just leisure passengers. So, focusing on travel types that may not pay four times the rate, but could pay two times the discretionary rate, is enticing. Unfortunately for them, there are five big issues with this approach:
Business And Leisure Has Always Been Blended
The idea that blending business and leisure on single trip is a new and innovative thing is ignoring reality. Who has gone to a convention in Las Vegas and not taken time in the evening, or stayed on an extra day, to see Cirque du Soleil, another good show, or just do some gambling? Orlando is another big convention city. Many people have gone to business events at the Orlando Convention Center while their family is enjoying the day at Disney or Universal Studios. In the year 2000, I spoke at an event in Amman, Jordon. My wife joined me on that trip, and had fun during the day while I was at work. We wouldn’t have left the country without visiting Petra, one of the most fascinating historical archeological sites on the globe. Twelve years ago, no one spoke of blended or bleisure travel, but it was happening regularly.
Naming something doesn’t make it it new, but can bring awareness to it. By recognizing that people commonly mix business and leisure on a single trip, it’s possible that airlines will find ways to leverage this fact through specific offerings. But suggesting that this is is new growth category that could replace otherwise lost business travelers does not make any sense.
Companies Will Have A Lot To Say
The biggest thing that separates corporate business travel from leisure travel is who pays for the ticket. When paying for the ticket themselves, passengers tend to be highly price sensitive and will choose flight options and cabin options that result in the lowest available fare. But when a company is buying the ticket, all of sudden a nonstop flight at the right time and in a premium seat all matter much more than the price. This is why corporate travelers pay three to four times the rate of leisure customers.
Most companies have policies regarding traveling with family, or staying on extra days to take advantage of local opportunities. The fact that these policies exist further support that this blended travel is not a new thing. But a blended trip won’t happen unless the company paying for the trip allows it. As businesses look for ways to attract and retain the best talent, it’s likely that flexibility in this area is something that is increasing. Alternatively, the company may require that the employee pay themselves for extra family members or extra days on the trip. This would put the employee into the “pay themselves” mode and they would likely look for lower-cost options than they might demand from their company when flying for business. The point is that the employee on their own cannot choose to take a blended trip without at least the company accepting the time and/or expense of the leisure portion.
Not Every Destination Is Equal
Business trips to common leisure destinations like Orlando or New Orleans would encourage more blending of leisure time into the business trip. But a lot of business travel happens in places that may not be as exciting. Or, it’s possible that the destination is more complicated if international and requires visas or other paperwork for entry.
You can have an enjoyable leisure experience in any location. Just seeing new places, eating at a new restaurant, or learning some local history can add to a trip in even the least visitor-friendly places. But not every business trip is going to encourage creating a bleisure trip. Also, times of year may be best to bring family, and available days for extra day adventures may or may not make sense everywhere business has to go. So, while combining leisure activities with some business trips may encourage more business travel, this will be focused in certain places and certain times of year.
Liability and Litigation Risks
Say you have a business meeting in Denver, so you plan to be at the required office on Thursday and Friday and they stay for the weekend to do some skiing. Your company may fully support this and agree to buy your flight home on Sunday, and pay for two extra nights of hotel. Great, but what if you break your leg while skiing on Saturday and this affects your ability to do your job for a few weeks? Did you get hurt on a business trip and does the company have any liability?
Or assume you bring your family on a trip with you and while you are at work, your rambunctious daughter accidentally floods your room. The company is paying for the hotel. Who is liable for the damage?
Naming a new kind of travel is great to bring awareness and focus to ensure that products are aligned to sell. It also, though, will create new litigation risks that companies will consider and help inform them about how to structure travel policies. When nothing goes wrong, what could better than having a few extra days of fun or having your family long for the ride? Things do go wrong, and shining a spotlight on blended trips will make some lawyers very happy.
Better To Accept Reality
Rather than look for the unicorns that will replace lost business travelers and pay a good price, the large U.S. airlines would be better off accepting the new reality and make changes to accommodate it. These changes can be in many areas: seat configuration, flight schedule, loyalty programs, organizational structure, and more. These changes require accepting that a world with 80% of 2019 business traveler volume is not a bad world, just a different one. It also requires recognizing that the airline was built for travel as it existed before the pandemic. Many decisions that made sense then make less sense today, so the airlines that move quickly to this new reality will gain a competitive advantage.