Since the pandemic has changed the way people think about business travel, the big US airlines have thought about new types of travel that could replace them. Delta spoke of premium passengers for the purpose of entertainment, or people who would pay for a better onboard experience, a hotel and an upgraded floor. Other large US airlines spoke of “mixed passenger”, or some said “delightful” passengers. This assumed growth category includes people whose travel includes some work and some leisure.
It’s understandable why major US airlines are looking for this kind of traffic. In the face of business traffic levels stuck at around 75% of 2019 volume, this revenue loss would be significant for the three largest airlines in the United States. Historically, business travelers have paid three to four times more than the discretionary price-sensitive traveller. Even a 10% loss of business traffic means that airlines do not have enough seats to offset revenue through leisure travelers. So focusing on types of travel that may not pay four times the price, but can pay twice the discretionary price, is tempting. Unfortunately for them, there are five big problems with this approach:
Work and entertainment are always mixed
The idea that blending work and entertainment into one trip is something new and innovative ignores reality. Who has gone to a convention in Las Vegas and didn’t spend the evening, or stayed up an extra day to see the Cirque du Soleil, another good show, or just do some gambling? Orlando is another great convention city. Many people went to business events at the Orlando Convention Center while their families were enjoying the day at Disney or Universal Studios. In 2000, she spoke at an event in Amman, Jordan. My wife joined me on that trip, and I enjoyed the day while I was at work. We would not have left the country without visiting Petra, one of the most fascinating historical archaeological sites in the world. Twelve years ago, no one talked about mixed or recreational travel, but it did happen regularly.
Naming something does not make it new, but it can bring awareness to it. By recognizing that people often confuse business and leisure in one flight, it is possible that airlines can find ways to take advantage of this fact through specific offerings. But to suggest that this is a new growth category that could replace missing business travelers is meaningless.
Companies will have a lot to say
The biggest thing that separates business and leisure travel is who pays for the ticket. When paying for the ticket themselves, passengers tend to be very price sensitive and will choose flight options and cabin options that result in the lowest available fare. But when the ticket company buys, a non-stop flight suddenly on time and in a premium seat, it all matters a lot more than the price. This is why business travelers pay three to four times the price of leisure customers.
Most companies have policies regarding traveling with the family, or staying on extra days to take advantage of local opportunities. The fact that these policies exist further supports that mixed travel is nothing new. But the mixed flight will only happen if the company that pays for the flight allows it. As companies look for ways to attract and retain the best talent, flexibility in this area is likely to be something that is growing. Alternatively, the company may require the employee to pay themselves for additional family members or for additional days on the trip. This would put the employee in a “pay themselves” situation and they would likely look for less expensive options than they would ask their company when traveling for work. The point is that an employee alone cannot choose to take a mixed trip without the company accepting at least the time and/or expense for the leisure part.
Not every destination is equal
Business trips to popular leisure destinations like Orlando or New Orleans will encourage you to blend your leisure time into your business trip. But a lot of business trips take place in places that may not be exciting. Or, the destination can be more complicated if it is international and requires visas or other paperwork to enter.
You can enjoy a fun entertainment experience anywhere. Just seeing new places, eating at a new restaurant, or learning some local history can add to a trip even in places that are less visitor friendly. But not every business trip will encourage the creation of a leisure trip. Also, times of the year may be best to bring the family, and the days available for extra day adventures may or may not make sense everywhere the business has to go. So, while the combination of leisure activities and some business trips may encourage more business trips, the focus will be on certain places and certain times of the year.
Liability and Risks of Litigation
Let’s say you have a business meeting in Denver, so you plan to be in the required office on Thursday and Friday and are staying over the weekend to do some skiing. Your company may fully support this and agree to purchase a flight home on Sunday, and pay for two additional nights at the hotel. Great, but what if you break your leg while skiing on Saturday and it affects your ability to do your job for a few weeks? Have you been hurt on a business trip and does the company bear any responsibility?
Or suppose you bring your family on a trip with you, and while you’re at work, your reckless daughter accidentally floods your room. The company pays for the hotel. Who is responsible for the damage?
Naming a new type of travel is great for increasing awareness and focus to ensure products match the sale. It will, however, also create new litigation risks that companies will take into account and help them inform how to structure their travel policies. When nothing goes wrong, what could be better than spending a few extra days of fun or spending a lot of time with your family riding? Things go wrong, and the spotlight on mixed travels will make some lawyers very happy.
It is better to accept reality
Instead of searching for unicorns that will replace lost business travelers and pay a good price, the big US airlines would be better off accepting the new reality and making changes to accommodate it. These changes can be in many areas: seat configuration, flight schedule, loyalty programs, organizational structure, and more. These changes require acceptance that the world with 80% of the volume of business travelers in 2019 is not a bad world, but a different one. It also requires acknowledgment that the airline is built to travel as it was before the pandemic. Many logical decisions are becoming less and less logical today, so airlines that quickly transition to this new reality will gain a competitive advantage.
