Companies around the world are shifting permanently to remote work and teleconferencing, in what comes as a massive, long-term blow to the airline and hotel industries. As a result of the coronavirus, firms have temporarily migrated to home-working, but many are seeing little reason to switch back once the pandemic ends.
Numerous recent statements and surveys have signaled this lasting change in attitude. Deutsche Bank’s AGM statements include mention of how remote work will provide long-term cost savings. Meanwhile, a Gartner study from April revealed that 74% of companies intend to move at least some employees to remote work permanently.
In other words, remote work isn’t simply a temporary adjustment to the coronavirus. It’s a permanent change. As a result, the hotel, hospitality and airline industries will suffer massively.
Last month, a Gartner survey found that most companies will shift employees to permanent home work post-coronavirus. Specifically, 74% will shift at least 5% of staff to remote work, while 47% while shift at least 10%.
This month, specific examples of major corporations shifting to permanent remote work have begun emerging. And depressingly for the hotel and airline industries, they’re not only embracing remote work. They’re also preparing to favor virtual conferences and teleconferences over business tripes.
Most notably, Deutsche Bank CEO Christian Sewing will deliver a speech on May 20 at the bank’s virtual AGM. In it, he will call for a lasting move to remote work and video conferencing.
Basically, Deutsche Bank’s AGM statements will reveal the following about the coronavirus’ impact on work.
Firstly, the coronavirus has shown that large-scale working from home is possible, without loss of productivity. Secondly, it has also shown that remote work is remarkably cost-effective. And at a time when firms will need to cut costs to survive a recession, offices and business trips will be among the first things to go.
Other firms besides Deutsche Bank have revealed plans to move permanently to remote work and virtual conferencing. Also this week, Westpac revealed that it’s considered a permanent switch to remote work among its technology staff. The bank’s CIO, Craig Bright, revealed that productivity among developers had actually increased.
We’ve not had enough time to step back and fully decide what this actually means for workforce strategy, but [chief executive] Pete King made the comment the other day that everything’s on the table, and I think it absolutely warrants careful thought.
Much the same goes for the likes of Mondelez, Barclays, Capita, and UBS, which have all recently expressed a desire to make more work remote.
This all comes as disastrous news for the hotel, hospitality and airline industries. If a majority of major corporations and companies decide to switch permanently to teleconferencing, rather than unnecessary international trips, these industries will be devastated.
Last year, Doodle’s 2019 State of Meetings Report found that two-thirds of meetings globally are a waste of time and money. This equals $102.5 billion in spending on travel and accommodation for U.S. companies. It also equals around $541 billion in spending for all companies worldwide.
As such, the coronavirus has shown that companies can get rid of this spending for good now. This means that, taken together, American airlines, hotels and restaurants are going to be roughly $100 billion worse off.
You don’t need a physics degree to work out how this will impact stocks in such sectors. The coronavirus has already practically killed airline stocks. But a permanent shift to remote work and teleconferencing will leave them in an undead state for a long time to come.