Mullet over

Business on top, party down below was the hairstyle descriptor attributed to our digital nomad lifestyles and many of us embraced the opportunity to frighten the local corner shop folk with our style choices.

And those of us who have been lucky enough to be able to work remotely have had a good run of it. But is it over? Reports suggest your sector needs you, so time to get to the barber. 

Pandox’s most-recent results presentation saw the group in good spirits, with secondary destinations coming back and leisure travellers prioritising travel over ‘other consumption’. In addition, the more perturbing: “Any downside risk for individual travellers’ travel consumption during the second half of the year is expected to be offset by a sustained improvement in business travel and increased international/Asian travel, which has not yet reached pre-pandemic levels”. 

It’s important to only trying and control what you can, so we’ll skate over the Asian travel. Does this mean that, come the autumn, it’s off the beach and into the tailored trouser? Pandox reported that, rather like those trousers after a few years of home working, the trade fair calendars in Germany were now “well-filled”.

At last week’s results, Hilton president & CEO Chris Nassetta commented that, “business transient keeps grinding up”, with the group looking to SMEs to continue travelling, anticipated soft landing at the end of the year or not. 

The message from Sébastien Bazin, chairman & CEO, Accor, was more chipper, as he raised the group’s 2023 guidance on the back of “robust demand in both leisure and business tourism. The performance enables us to raise our 2023 guidance and to continue investing in our brands, talents and digital tools”. 

And raised guidance raises share prices and brings in more cash when you sell off half the company, as is well known. 

Marriott’s president & CEO Tony Capuano also reported that business transient revenue saw strong year-over-year growth [in the US] with leisure transient revenue rising as well, “albeit more slowly, as more travellers from the region chose to visit overseas destinations”..

Pandox was confident that some markets still contained consumers who had plump savings accounts, but of course that can’t last forever. Earlier this year Icelandair  CEO Bogi Nils Bogason told Airline Weekly:  “History tells us that when costs are going up everywhere people start to spend less on some things. This is just what we have seen in the past. So we are expecting that the inflation will impact demand in the end.”

Excellent ominous note on ‘in the end’.

In the UK, the most-recent figures from the Bank of England showed households withdrew a net £4.6bn from banks and building societies in May, the highest level of withdrawals since October 1997.

Looking wider, the OECD’s ongoing reporting on household savings  showed a spike around 2020 and then a descent. Switzerland and Ireland were still holding onto their doubloons, no great shocks there.

When people are dipping into savings they are also thinking about how to replenish those savings and less about how their boss really should be more flexible and let them work where they want. The UK is increasingly the outlier in take-up of home working, with enthusiasm for offices greater elsewhere in Europe and the US.

So with all these minds focused on the job in hand, will there be an increase in business travel to make up for those who have drained the leisure bank? As Germany’s trade fairs have shown, the need for a focus on focused activity is strong (and is doesn’t hurt to hang out with your competitors and see what they’re up to/what higher paying jobs they might be flinging around). 

There is a clear business case for attending, say, the Frankfurt Book Fair. But is that going to be enough to make up for those of us who were rushing to Frankfurt for our summer holidays? Will we need to see a return of the road warriors? 

Morgan Stanley’s report at the end of last year  suggested yes. But budgets would be kept in check, so no staying at those lovely luxury hotels you have been enjoying. Virtual meetings will still have their place but, when money is tight, productivity comes under scrutiny. This is good news for the mulleted as there should be a decline in meetings for meetings’ sake and more actual doing.

And for the hotel sector? Marriott and Hilton have already been thinking about the road warrior and their price points. It’s also good news for fans of resurrecting the ChoiceHam story and for those waiting for Accor to make good with its split and sell off the economy segment. 

So all in all, autumn will bring with it mists, mellow fruitfulness and a trip to the barber. 

NewDog PR will be most decidedly out of the office until 21st August. Haircuts remained unconfirmed at the time of going to press. We hope you are also enjoying some lovely time off. 

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