Paul Tilstone is managing partner at business travel consultancy Festive Road
I clearly remember the first time I came across the term “Social Capital”. It was in 2022 when Microsoft hosted a one-day roundtable on Purposeful Travel moderated by Eric Bailey. I don’t remember the 20 or so tour guides who attended the summit, the first time I used the term, but I can remember the poignancy of that moment. Not only were we discussing what purposeful travel means for travel programs and the broader sector, but we were actually building social capital among all the summit attendees. The format of the day, the remote location of the retreat, and the mobile signal-free environment fostered our thinking while creating deeper connections.
By all accounts, the concept of Social Capital has been around for a while, as outlined in a 2001 Harvard Review article. It’s essentially a term that describes knowing and trusting people, a currency if you will, representing the depth of relationship between us and the people we want to do business with. As HBR puts it, “The term beautifully captures the notion that investments in these relationships ultimately return real, visible gains.”
Like all forms of capital, Social Capital needs effective management. It suffers from exhaustion and requires constant attention and investment. In 2019, the level of investment in our relationships was high and the Social Capital we built was strong, with a rapid increase in business travel. Once the pandemic hit and travel stopped, the investment we made in our connections proved invaluable as everyone used connections to keep their businesses alive. But the Social Capital we had built up soon started to wear off, and we could feel it in our virtual interactions.
When we re-entered the world of travel, our compulsion to meet was irresistible. We began to see not only why face-to-face communication is so important, but also that the type of interaction and shared experience significantly affects the level of Social Capital built and the value of a visit.
So Social Capital is a term that perfectly captures why meeting in person, and therefore travel, is so valuable, and why we continue to struggle with the concept of ROI for travel. Because the shared experience created through physical interaction and business trips and meetings may not actually result in an immediate financial benefit—it’s an investment in the future.
Knowing when to use virtual or in-person options will become a competitive advantage, as will the format of that face-to-face interaction.
Paul Abbott, CEO of American Express Global Business Travel, regularly speaks to the media about the important role travel plays in driving culture and the rise of travel as a result of teaming up due to the remote workforce. And he’s right, but these are not easy forms of travel to quantify the return in terms of immediate and direct financial ROI. It’s difficult to financially justify a trip or team gathering every time.
But with the EU’s Corporate Sustainability Reporting Directive coming into effect this year, identifying which types of travel bring value to organizations will be in focus as companies seek to reduce travel emissions. And with that, there’s a great opportunity for travel buyers to think more strategically about the value of travel in their organizations, rather than focusing on operational delivery.
Smart companies won’t just think about what types of trips should or shouldn’t happen in order to drive their business, they’ll work to increase the impact of trips to reinforce purpose. Trying to help people manage their Social Capital levels to achieve both short and long term goals will be part of that equation. Knowing when to use virtual or in-person options will become a competitive advantage, as will the format of that face-to-face interaction.
Since I first heard the term, the concept of Social Capital has continued to enter my line of sight with increasing frequency. This was amply reflected in several GBTA Ladders pitches I heard last year, where teams from across our industry focused on the importance of using travel to deepen relationships and build capital created. This coincidentally spawned several startups focused on the same challenges faced by the GBTA Ladders teams. That’s why I believe it defines the era we’re operating in now and will resonate even more in our sector in 2024. Recognize and use the principle of Social Capital.
If you thought business travel was already in the limelight, wait to see what the next few years will bring. Determining the value of travel against its impact on people and the planet will come to define us. Let’s face it, it already is. The era of Purposeful Travel brings with it an understanding of the importance of building and maintaining human relationships to help companies achieve their future goals. Social Capital is what we are all about. Relationships are not only valuable in our sector, they are the reason we exist – to deepen relationships across all sectors our industry serves.