Also: Poor earnings forecast, Occidental's moonshot, WFH diversity.
Good morning.
The amount of time I’ve spent on airplanes and in airports over the past year has led me to buy into the idea of “revenge travel.” With the pandemic largely behind us, everyone seems to be going everywhere all at once.
But a report out this morning from the folks at Deloitte (which sponsors this newsletter) reveals a more complex picture. (CEO Daily got an exclusive early peek.) While leisure travel surpassed its pre-pandemic highs many months ago, business travel remains depressed and isn’t expected to fully return to pre-pandemic levels until the end of 2024. Some interesting takeaways from report, which is based on a survey of corporate travel managers in the U.S. and Europe:
–Corporate spending on travel will reach 57% of its 2019 levels in the first half of this year and is expected to reach two-thirds of 2019 levels in the second half. Seventy-one percent of U.S. companies expect a “full recovery” by the end of 2024.
–International business travel is on the rise, accounting for 33% of all U.S. business travel in 2023, up from 21% in 2022.
–Travel to conferences and live events returned in force, becoming the biggest trigger for increased spending in 2023, up from fifth place in 2022. There appears to be pent-up demand for both industry conferences and internal corporate events. (That fits our experience at Fortune.)
–Climate concerns continue to be a damper on business travel. A third of U.S. companies and four in ten European companies say they need to reduce travel per employee by more than 20% to reach their 2030 sustainability targets.
–The travel managers said they expect the “new normal” for work-from-home days to settle at about 2.2 per week, down from 3.9 at the peak of the pandemic, but three times the pre-pandemic average of 0.7.
More news below. And check out this new economic analysis from the folks at Goldman Sachs, who see Friday’s employment numbers as evidence that the economy could be headed for a soft landing. I’ve been a skeptic… but welcome the possibility!
Alan Murray
@alansmurray
alan.murray@fortune.com
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Declining profits
According to Wall Street forecasts, S&P 500 companies are expected to report a 6.8% decline in first-quarter earnings year-over-year due to high inflation and reduced demand amid recession fears. A decline of that size would be the biggest falloff since the 30% drop in the second quarter of 2020 when COVID shut down the economy. Financial Times
Occidental's $1 billion moonshot
Occidental Petroleum has broken ground on a $1 billion direct-air carbon capture plant in Texas’s oil-rich Permian Basin. The moonshot project—which has investor Warren Buffett’s blessing and uses tax incentives from the climate-focused Inflation Reduction Act—is part of CEO Vicki Hollub’s plan to reach zero carbon emissions by 2050. The economics, however, remain sketchy. Wall Street Journal
WFH diversity
Survey data from the U.S. Census Bureau shows that during the pandemic, workers who were younger, more diverse, and better educated were more likely to work from home as the share of the U.S. labor force working from home overall rose to 17.9% in 2021 from 5.7% in 2019. The Associated Press
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Cloud trends and strategies for innovation According to Deloitte’s Future of Cloud Survey Report, the cloud can be a force multiplier for business performance and digital transformation. Explore cloud innovation insights and trends from the report, including how leaders might reduce uncertainties and gain the most value from cloud investments. Read more
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