What our expense system data says about spend and recovery
Webexpenses’ system data is compiled from over 350,000 users worldwide. And it can tell us a lot about the changing tides of business, travel, and economy. Over the course of the last 18 months, it has served as an indicator of how businesses were responding to the COVID pandemic - and we’re beginning to see signs of good things ahead.
For example, the quickly changing tides of 2020 saw an emergence of new kinds of expenses being claimed. As more people transitioned to work at home, IT equipment such as PCs, laptops, and office furnishings were being claimed. For those still working with the public, expenses for PPE, like face masks and hand sanitisers, grew exponentially.
Now, we’re beginning to see claims for travel-related expenses re-emerge.
For comparison, in the first six months of 2019:
- Webexpenses users submitted 121,628 mileage claims.
- Totaling 45 million miles.
- Approximately 7.5 million miles per month.
During the same period in 2020, as the pandemic began to hit:
- Mileage claims dropped to 90,930
- Only 32 million miles were tracked.
- Approximately 5 million miles per month.
Comparing May 2020 to May 2021:
- Mileage claims picked up by 356% (4,436 to 20,274).
- A total distance resulting in a 336% increase.
- Total miles claims reached 78% of May 2019 pre-pandemic levels.
Now, as Covid cases decrease, vaccination rates increase, and we inch towards herd immunity, our data indicates that we are starting to see businesses transition back to normal - and with the addition of PPE claims.
But what is herd immunity and why does it matter?
Simplified, herd immunity occurs when a large number of the population is immune to a virus. If enough people become immune, infection rates will drop and the virus will soon disappear. Vaccines play a big part in building resistance against the virus.
So, when can we expect to reach herd immunity?
The research looks promising. According to health experts, 70-85% of the population is required for herd immunity. For herd immunity to be reached, enough people have to be vaccinated and develop antibodies.
With this in mind, the UK and US could see herd immunity within months. Public Health England explains that having one dose of the vaccination can prevent the spread of the virus by 49%. As of June 6, 61% of the UK have had at least one vaccination. And 42% of the UK population are now fully vaccinated.
If we follow the same pace of the last few months, we can project over 75% of the UK will be vaccinated by the end of July. This means herd immunity could easily be achieved by October this year.
The US is also projected to follow a similar timeline. According to a Bloomberg real-time study of COVID vaccine demographics, “In the US, 302 million doses have been given so far.” The first week of June, the US was averaging nearly a million doses per day. At the current pace, their research suggests that the US - the world’s third most populous country - could reach the 75% herd immunity threshold within six months.
Mass vaccinations accelerate travel and spend
Growing vaccination rates have broader implications for travel industries and related businesses (retail, hospitality).
For example, as the US reached 50% of one dose, travellers reacted, taking to the skies.
A small sampling can be found in the home of our US office. In Austin, Texas travellers experienced hours-long lines the first week of June as travellers took flight.
At its lowest point during the pandemic, air travel was down 96% versus 2019. In the US, the week of May 23 saw 1.87 million people go through airport security, reaching 90% of 2019 levels.
And as employees return to the office, business travel is next on the list.
Likely due to the increase of vaccinations, these people are beginning to feel more comfortable travelling which has resulted in this influx of mileage claims and airport security lines.
This is a great reassurance for travel-related businesses. Business travel is more lucrative. For example, business flyers traditionally account for 12% of trips but are 75% more profitable.
This uplift extends beyond just airlines. As more people travel, hospitality is also seeing an uplift. In May of this year, seated diners at reopened restaurants reached 100% of 2019 levels, according to OpenTable.
Similar trends can be spotted across the corridor as the UK loosens its restrictions.
In April when retail and hospitality reopened in the UK, people were ready. Shoppers headed out, creating a 471% spend surge over the previous year. Spending reached 84% of pre-pandemic (2019) levels. Hairdressers were up by 500%. And, even with restrictions still in place, pubs managed to see 150% increase.
What's it all mean for the future?
There’s still a way to go before we match 2019 figures. However, the increase in claims submitted suggests more employees are travelling to work and meeting with clients.
Leisure travel, retail shopping, and eager restaurant/pub patronage suggest that as we head towards herd immunity, people are becoming more comfortable and willing to travel, eat out, and shop.
And thus, we expect to see these statistics return to pre-pandemic levels now that business lunches can resume; resulting in more travel, face-to-face interactions and life that feels a little more like ‘normal’.