Rate rises, travel: 6 business leaders’ predictions for 2022

It has been a challenging 18 months with the country shut down as a result of the COVID-19 pandemic, but as we start to emerge from lockdowns attention is turning to the new year.

A strong economic recovery and a lot of travel; that was the consensus from the 2021 Illuminate conference on the 21st of October where some of Australia's top business leaders shared their thoughts on the future.

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This is what six of Australia’s top business leaders had to say about where we are headed in 2022.

Alan Joyce, Qantas CEO, on international travel

All in all, Alan Joyce gave a promising outlook for Australia’s travel recovery now that most states are learning to live with COVID-19.

On top of that there are domestic and international reopening plans, apart from WA which Joyce believes will have its borders open by February.

NSW scrapping hotel quarantine was needed to get businesses travelling again, Joyce said, and he anticipates Qantas will return to 100 per cent of pre-COVID domestic travel by early 2022.

Specifically, flights between Sydney and Melbourne will return to Qantas’s pre-COVID schedule of 55 flights per day by February 2022.

“We will progressively, from the first week in November, go back to nearly 15 flights a day and by Christmas get back to closer to 30-40 flights per day,” he said.

“In February, when business comes back, we will be close to the pre-COVID schedule.”

Joyce forecasted a positive return to international travel for Australia, and he is planning for almost all Qantas aircraft to be in the air by July 2022.

Transatlantic travel is opening, travel in Europe is at 70 per cent of pre-COVID levels, and domestic travel in the US is back bigger than pre-COVID levels.

Bill Evans, Westpac chief economist, on the interest rate rising

Bill Evans shared his growth outlook for the next 12 months. His analysis of credit card data revealed that spending in NSW and Victoria has started to pick up.

The recovery of NSW and VIC will help Australia start to see a turnaround in GDP this December quarter, Evans said.

However, the real momentum will build from the first half of 2022 and through the year as Australia reopens.

Evans said the growth will be driven mostly by household spending. He said that during lockdowns household savings have risen and there is a possibility that spending will actually far outpace income growth.

Additionally, Evans said he believes the Reserve Bank will raise the cash rate in the first quarter of 2023 and continue raising it to 1.25 per cent by the end of 2024.

He said this is largely due to an expected fall in the unemployment rate to 3.8 per cent by the end of 2022, and it will see house prices fall in 2023.

“By the time we get to the end of next year, the RBA will have achieved its objective of 2.5 per cent inflation, full employment, and wages growth getting up to around three per cent,” he said.

Dan Gregory, The Behaviour Report co-founder, on the ‘Great Resignation’

Dan Gregory said the return to face-to-face interaction will help keep workers engaged and in turn help boost business productivity.

“Face-to-face meetings are critical to building trust, as a lot of communication is behavioural or non-verbal,” he said.

“We make non-verbal assessments of others, particularly when meeting for the first time, and it’s those silent cues that are critical to build a rapport and trust.”

Gregory said that engagement was a key problem that many organisations, particularly large ones, faced even pre-pandemic and was exacerbated during the pandemic.

“Disengagement from work is a growing issue and unfortunately isolation and remote working during the pandemic has led to what has now been coined as The Great Resignation and organisations globally are risking losing vital employees,” he said.

“People are now taking the time to re-evaluate their values and consider what is most important to them, leaving the workplaces they believe no longer align with those values.”

When Australia opens, Gregory said he believes companies will have an opportunity to increase engagement by focusing on reconnecting with their employees in a real way.

“The more you are able to create those face-to-face connections, the more people re-establish trust … it increases engagement, because we are connecting with people in a real way.”

Jayne Hrdlicka, Virgin Australia CEO, on domestic travel

Jayne Hrdlicka said the events of the last 12 months have helped businesses explore their ability to become agile and adaptable based on ever-changing circumstances.

She said that as the country reopens and transitions into a new normal of living with COVID, Virgin will maintain flexibility.

“Even though we will move back to seasonal planning at a macro level, at a micro level we will continue to move schedules around where we see demand build up,” she said.

“Our strong Sydney-Melbourne and Brisbane-Melbourne-Sydney schedules will remain, while we’ll also consider where demand has shifted. Now that people are used to working differently, I predict a larger demand pool for adding leisure to corporate travel.”

Hrdlicka also said the company is ramping up its travel offerings to businesses and consumers in the lead up to Christmas, both domestic and international.

“Promisingly, we’ve accelerated our thinking regarding international travel. We plan to resume flights to Fiji from mid-December, with the possibility to add Bali to the mix.”

Hrdlicka believes travel to New Zealand is on the horizon soon, while Virgin will consider broader, long haul international travel in the coming months.

Charlene Leiss, President of FCTG, on the US

Charlene Leiss shared insights on the return to travel in the US, where she said nearly all aspects of life are back to normal.

“In the US, domestic travel is back to normal except for mask-wearing. Airports are busy, flights are full, and airlines are upping their capacity across all routes,” she said.

“There are more restrictions and complexities in international travel, but that is also starting to pick up.”

Leiss said the pro-active focusses that will most help businesses resume travelling is good communication and a workable framework for returning to travel.

Being armed with knowledge about restrictions, accessing the latest updates and receiving support will also be important, she said.

Graham Turner, Flight Centre CEO, on business confidence

Graham Turner shared Flight Centre’s journey through the pandemic in a discussion with Corporate Traveller General Manager Tom Walley.

Turner said Flight Centre focused on keeping as many people on as possible and protecting the key assets it couldn’t afford to lose, particularly the team members who always deal with customers and suppliers.

During the last 18 months, the company focused on transforming its technology offerings and its systems.

Turner forecasted a return to profit globally in six to nine months but said it may be two to three years for the travel industry to return to pre-COVID sales.

“As we open up, I am confident we will come out of this stronger than when we went in. We will have a reasonable level of normality in travel by Christmas and I think even Queensland will bring forward their overseas travellers being allowed in without quarantine,” he said.

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