As America hurtles toward a post-pandemic future, some pre-2020 customs won’t survive the transition. Chief among those up for re-evaluation: business travel. On the latest Pivot podcast, Scott Galloway and Kara Swisher discuss whether the corporate-funded journeys of the past make sense anymore.
Kara Swisher: Air travel is surging this week. Over the weekend, TSA officers screened the highest number of passengers on a single day since March 15th of last year. The reduction in travel hit airlines hard —US airlines lost more than $35 billion combined. On the other hand, a smattering of colleges like Yale University are canceling spring break this year in an effort to keep students from traveling to hotspots like Miami Beach. What’s going on, Scott? What do you think is going to happen now?
Scott Galloway: It’s both super exciting, and also we don’t want to acknowledge this, it’s also frightening. Duke just canceled classes — they have an outbreak there.
Swisher: This is what Dr. Fauci said would happen — little outbreaks.
Galloway: We don’t want to acknowledge this, but this is why it’s so important that we get vaccinated. I see it as a race between vaccinations and variants. Viruses are incredibly impressive pathogens, organisms — I don’t know what the correct term is. And you can bet that this virus is working overtime to try and figure out a way to get around these vaccines.
Galloway: And when we have people traveling and we create more opportunities for asymptomatic carriers, you’re kind of… I don’t want to say you’re arming the variants. But I think this is a very nervous time, because if you want to see a crash that would affect everybody, if all of a sudden there’s an outbreak of a variant that appears to …
Swisher: That resists the vaccine.
Galloway: That is when shit gets real for us. I mean, it’s already gotten really real, it’s a half a million deaths. But all of a sudden it looks like, wow, we could go from half a million deaths to five million, and the economy won’t have any Kevlar against that. So look, I’m a glass half empty kind of guy. I think it’s exciting that people are traveling. It’s a good sign that people want to get out. There’s no doubt about it, this is going to be the roaring 20s if we continue …
Swisher: Yeah, agreed. What would be interesting to see is if US airlines actually changed their practices, like in terms of how they behave and operate their businesses. Also, I just talked to Airbnb’s Brian Chesky for Sway coming up. He has pivoted his business, obviously. But that business will go right up. They’re seeing an upsurge in traveling, he said. Not internationally yet, but in the country.
Galloway: I mean, I love Airbnb, but it’s going to change. We’re just going to change in so many ways. We’re going to return to travel, but I think we’re going to travel differently.
Swisher: He said he wasn’t focused on business travel at all. He said it’s over.
Galloway: Oh, business travel is going to get crushed. I have several friends who do nothing but circle the planet raising money from sovereign wealth funds. And they say they’ll still go to Canada to meet with Ottawa teachers —they’ll still go golf or whatever. But they’ll go once a quarter instead of more frequently. I mean, they’re just off planes.
Because everybody has learned new technologies and is comfortable. I think travel is going to be reconfigured. I think people are going to spend as much money, but they’re going to crowd it around leisure, travel, and consumption, and travel with their families.
Swisher: That is precisely what Brian said. He said he doesn’t think business travel is going to come back like it was. He talked about Airbnb’s own headquarters, that they have these beautiful headquarters. And he’s like, I rethink everything now. Not that he’s not going to make it available if people want to go in. But it’s going to be a much different strategy. At the same time, he feels like most of the investments his company makes should be in consumer travel. But they’re not going back into airlines. Remember, they had an airline plot going on.
Galloway: A lot of airlines will go bankrupt, and they’ll be reconfigured. Airlines in the United States have gone bankrupt, or they call it restructuring, I think 62 times since the turn of the millennium. Airlines are famous for going bankrupt. And guess what? That’s fine, because it’ll give another set of investors a chance to come in and try and reconfigure and make airlines more resilient to these types of shocks.
Swisher: Of course at the same time, the fact that travel is down means emissions are down, obviously. When I talked to Bill Gates, he talked about green fuel, essentially. Fuel that’s made with less emissions. And it’s much more expensive, it has a real premium on it. They’re not really going to invest in that, right?
Galloway: Well, it’s two different issues there, how airlines reinvent themselves. But I think it’s a big question for society and for all of us as individuals, as it relates to our professional and our personal lives, our relationships, our behaviors. A crisis is a terrible thing to waste. And what I say to my kids and my students is “Ask yourself, what are you going to leave behind?” I mean, there were parts of the country where emissions were down 20, 30, 40%. And the question becomes, well, might that be something we want to hold on to even post-pandemic? And what would be required to do that? It’s an exciting moment to say, how do we leave emissions behind? I also think it’s a really interesting exercise to say, what about my relationships with my children, my spouse, my parents, my friends, my coworkers was better, and what was worse? And which relationships or behaviors do I leave behind?
Swisher: With my baby, my young daughter, I would have been traveling quite a bit. And I have to say, I want to travel more intentionally. I hate to use that word because I hate that word. But- You know, just more intentionally. Do I have to do this? No. Can I do it online? Yes. That kind of thing. I think it’s turned out to be just fine. And the kind of stupid trips where you travel somewhere. I mean, Farhad Manjoo had a piece about this. He traveled one place to get in an argument with someone for an interview, and it didn’t even work. And he came back and he was like, it was a waste of money, time, and emissions. When he could have done it in a much different way.
Galloway: I track everything I do pretty meticulously. And my first business, Prophet Brand Strategy, my biggest client was Audi. And I used to commute every week from San Francisco to Munich, and then get in a car and drive to Ingolstadt, Germany. Such that I could spend one or two days with the CMO of Audi trying to figure out what Audi’s purpose was, as a brand. And I was commuting back and forth to Germany.
Swisher: Is that a 10 hour flight? Right?
Galloway: No, like 11. Consulting is a young woman’s game, it’s a terrible lifestyle. Anyway, in 2019 I did 41 speaking gigs. And for 25 of them I had to travel. And when I looked at the amount of money and amount of miles, I spent somewhere between $75,000 and $125,000 — or my clients spent that — on just my travel. And in 2021, I will do somewhere between 70 and 80 speaking gigs, and I’m not traveling. And I’m going to cut that entirely out of my life. If I can’t go into my studio, turn on Zoom, then I don’t do it. I’m not going to the Radisson in Scottsdale.
And when you think about what that means, not only is it a destruction in business travel, but I also think it’s a real opportunity for mothers and fathers to spend more time with their kids. Right? It’s like, okay, I might give up a little bit of income, but I save a lot of money, save a lot of emissions. And where do you reinvest that capital? Do you reinvest it in remote technology? Do you reinvest it in your family? Do you reinvest it in making more money? What’s interesting about it is that digitization will have a negative impact on the speaker circuit, which I’m technically on. There’s sort of Tier A, and then there’s-
Swisher: I’m familiar.
Galloway: There’s Tier A that gets about $60,000 to $200,000 for a speaking gig, and then there’s Tier B. And Tier B is about $20,000 to $40,000, and there’s a lot more of those folks. Those folks are getting crushed because, by going remotely, you take your prices way down, and so you can get Tier A for what used to be Tier B prices, and they’re soaking up everything because they can do two or three gigs a week, versus just one. So with digitization, there’s big winners, and Tier B gets crushed, and you’re just seeing it everywhere.
Swisher: Guess what? You just moved into Tier A this week. You moved into Tier A.
Galloway: HBO star. That’s right.
Swisher: All right, Tier A minus, I would say.
Pivot is produced by Rebecca Sananes.
This transcript has been edited for length and clarity.