Long-distance mobility: China and US to recover the earliest in 2022, Europe follows three years later

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• Customer sentiment: Business travel to drop by 24% in Europe and the US, and by 21% in China
• Travel consciousness and sustainability will reshape the mobility industry
• Industry players need to revise existing operating models, double down on sustainability and chase new customer segments

Munich, December 2021: The pandemic has had a profound impact on travel behavior and the global mobility industry. Nonetheless, demand is still expected to pick up in the next few years with China and the US set for recovery in 2022. In Europe, long-distance travel demand is expected to stabilize by 2025/2026, but business travel is unlikely to return to pre-pandemic levels before 2030. These are results of the study “All Change: How Covid-19 has disrupted the future of long-distance mobility”, for which Roland Berger conducted a large-scale consumer survey, interviewed industry experts and modeled a forecast to analyze the impact on and outlook for air, rail and road travel.

“Our analysis shows that while demand may be slower in some regions and dimensions – particularly in Europe, air and business travel – long-distance travel will largely be back to pre-pandemic levels in the next few years,” says Didier Bréchemier, Partner at Roland Berger. “Yet, the demand will be different – for example, a greater share of people will want to travel by train, air passengers will seek out environmentally-friendly airlines and business travelers will venture out of the office less, but for longer time periods.”

Customer sentiment more pessimistic than market forecasts
The mobility behavior survey of 7,000 consumers in China, Europe and the US, conducted for the study, reveals two core changes to be expected once all Covid-related travel restrictions have been lifted in the future: One, the total number of trips customers intend to take (private and business) will drop by around 20%. Two, the demand for business travel will fall significantly below pre-crisis levels with minus 24% in Europe and the US and minus 21% in China. Business travelers, especially in Europe (44%) and the US (40%), were less motivated to travel due to the adoption of virtual mobility. In China, regulations and legislations (45%) remain the key factor influencing business travel behavior, followed closely by budget concerns (43%).

Travel consciousness and green mobility will shape future travel
After a review of market drivers and interviews with 200 industry experts the authors identified key trends that change travel behavior and mobility patterns. The pandemic forced companies to revise their corporate travel policies as well as implement virtual communication technologies. The trend of travel consciousness and efficiency is expected to continue, it will be most felt in business travel.

An increasingly sustainability-minded consumer base has already led industry players and governments alike to implement regulations on CO2 emissions. Private and business travel in Europe are expected to be impacted by the green mobility and sustainability trend. The third trend, mobility mode innovation is not expected to have an impact in the short term on the travel industry, as new technologies like autonomous vehicles or passenger drones are unlikely to achieve market penetration before 2030.

Forecast – Europe the slowest to recover, industry faces structural changes
Based on the assessment of market trends and both surveys the Roland Berger experts modeled a forecast assuming a "new normal" for traveling with all Covid-19 related restrictions lifted in 2024. Driven by a strong market growth, China is expected to recover the fastest by early- to mid-2022. The US will follow later in 2022. In Europe, long-distance travel demand is expected to stabilize by 2025/2026.

To overcome challenges industry players also will have to adapt to the rise of new segments, such as bleisure (business/leisure), as work-life boundaries blur. With clients' expectations changing regarding service, late booking options and transparency on sustainability, companies need to adapt their product offering and customer relationship management. “Industry players must focus on new customer segments, overthink their operating models and integrate sustainability into their corporate strategy,” says Bréchemier. "As different customer segments recover at different speeds, for example, customized, segment-specific product offerings could pay dividends and offer a competitive edge."