Teampay’s Andrew Hoag on the state of business travel today

Travel is back, baby

Andrew Hoag is the CEO of Teampay, a software company that helps companies manage and control what their employees are spending. Teampay clients range from manufacturing to software and hardware firms, but most were founded in the last 15 to 20 years and are cloud native with a strong tech stack and a digital-first approach. As such, Hoag has a unique vantage point into how much startups are investing (or not investing) back into business travel:

• The last three quarters have been the strongest in travel spend over the last few years, with a particularly strong rebound in February after a brief December and January holiday dip. “A lot of CEOs feel like the pendulum swung maybe a little too far to the fully remote,” he said. “Humans are social creatures,” and it’s easier to pick up nonverbal cues and build rapport in real life, in Hoag’s opinion.
• Typically, around 5% of corporate budgets are allocated towards travel, and that dipped to as low as 1 to 2% during the pandemic. Now, companies are sitting at the 3 to 4% range.
• Conference and tradeshow spending also picked up again at the end of last year, doubling in the last six months. Overall, Hoag said this spend is approaching the same levels as 2019.

This all tracks with what others are seeing out in the corporate travel space:

• In China and the U.K., intent to travel has risen by two and 9 points respectively between October and February, according to a new Morning Consult survey.
• Half of US adults surveyed by Harris Poll in January reported attending an in-person public event in the three months prior. Only 38% reported attending a virtual event in that same period.
• Younger adults were more likely to attend in-person events, with 71% of Gen Z and 60% millennials respondents telling Harris Poll they had, compared to 56% of Gen X and 34% of baby boomers.

Beyond gathering data on how other companies are changing their relationship with travel, Hoag has been experimenting with how Teampay employees travel internally:

• Pre-pandemic, the company was fully local and based in New York. Since then, they’ve turned hybrid, with people scattered across the country getting together once or twice a quarter in person to touch base.
• In January, company leadership wanted to work together in Mexico City and decided to open the trip up to the entire company. Hoag gave everyone a flat stipend to work out of the city for a week, covering meals, hotels and travel arrangements. A quarter of the company ended up gathering at a WeWork there for that week.
• From a cost standpoint, Teampay’s office expenses are half of what they used to be pre-pandemic, so they simply reallocated the savings towards this retreat. They still spend less on additional corporate travel than what they used to spend on sustaining a full-time office.
• Although the benefit is hard to measure, Hoag feels the Mexico trip was definitely worth it because team members were able to build rapport and “are working together now in different ways.” He referenced a 30-minute whiteboard session with the company’s director of product, which they had been previously trying to solve across ten different Zooms with five different people. That 30-minute session “changed the way that we think about our product roadmap.”
• The company plans on doing a trip like this at least twice a year and potentially even quarterly.

Still, the number of pre-pandemic business travelers who say they will never take a business trip again has grown in multiple markets, according to the same Morning Consult survey. This might be a permanent downturn, although my bet is that, like the whole return-to-office debate, we’ll ultimately see a hybrid scenario rise to the top.

What do you think? Does this all track with how you feel about business travel and what you feel comfortable with at this point in the pandemic? Would you camp out in Mexico City with your co-workers for a week? Let me know: [email protected].

Web3 is coming for ed tech

My colleague Amber Burton transitioned to the ed tech beat this month (Send her congrats and tips! [email protected].) and is already killing it. This week, she wrote about how enterprise-focused ed tech is having a moment. Ed tech is even, believe it or not, on the blockchain. Investors have spent over $2.1 billion on skilling companies this past year alone. Part of this has to do, of course, with the whole talent shortage thing. Because if you can’t hire, you can always try to retrain, upskill and reskill existing employees. One company, 101, has launched something called the “metaversity,” aimed at solving the problem of credentialing skills.