Photo courtesy of Delta Air Lines
A huge portion of the restaurant business has recovered much of not all their lost sales from the pandemic—even if it is a temporary result of stimulus payments and the ever-present “pent-up demand.”
One big area where the industry still needs recovery is among higher-end restaurants that have historically relied the most on dine-in service and business travel in particular.
That could pick up this summer, at least according to some airline executives. Glen Hauenstein, president of Delta Air Lines, told analysts last week that the company expects improvements in business travel in the summer before they accelerate in the fall.
“We anticipate the significant increases will occur after Labor Day as we enter the more traditional business travel season,” Hauenstein said, according to a transcript on the financial services site Sentieo. “That will happen as vaccinations become even more widespread and offices continue to reopen.”
Overall, travel has been on the upswing. At least 1 million travelers have gone through airport security every day since March 10, according to data from the Transportation Security Administration. That includes nearly 1.6 million people on Sunday.
By comparison, only 105,382 people went through checkpoints on the same day a year ago.
On the other hand, 2.4 million people went through security screening on the same date in 2019, meaning that a lot of travel is still not happening right now. A lot of that is through corporate accounts, where meetings and conferences and other large gatherings are still not being held, along with regular business meetings.
Business travel is an important driver of business to much of the industry, as meetings are catered or held at restaurants while travelers dine out at airport Chili’s restaurants on the way to a conference and at higher-end places for after-meeting dinners. The lack of business travel has hammered certain sectors of the industry that relies on that group.
The recovery in business travel was always expected to be slow. Big meetings and large events are still not allowed in many places, after all, and many companies have grown accustomed to budgets with lower travel spend.
In addition, businesses are still letting workers telecommute—though that number is declining. In March, for instance, 21% of employees worked from home, down from 22.7% in February.
As more people return to the office, they’ll return to more of their office habits—which could be good news for restaurants based near offices that target lunchtime consumers. But it also likely means meetings can’t be far behind.
Vincent Morales, CFO of PPG Industries, a Pittsburgh-based maker of paints and specialty materials that has a sizable aerospace business, said last week that travel will return in waves, starting with domestic tourism and followed by business travel before international travel returns.
To be sure, consumers in general remain wary of the pandemic, especially as cases remain a problem in many states. According to Civic Science, 62% of Americans have some concern about the pandemic.
In that same survey, by the way, a growing percentage of Americans are eating out at restaurants now—61%. Yet they are reticent to go to concerts and festivals—35% of Americans said it would be six months or longer before they would be comfortable going to a major public event, the same percentage as those who are comfortable doing so right now. It’s not a stretch to think of big conferences would have similar results.
It remains to be seen just how much business travel returns. A true full recovery could take a while. Yet it appears as if business travel and the restaurant sales that come with it is on its way.