Paul Tilstone is managing partner at business travel consultancy Festive Road
I can distinctly remember the first time I came across the term “Social Capital”. It was in 2022 whilst facilitating a day-long round-table on Purposeful Travel, driven by Eric Bailey at Microsoft. I can't remember, of the 20 or so travel execs attending the summit, who first used the term, but I can recall the poignancy of the moment. Not only were we discussing what purposeful travel meant for travel programmes and the wider sector, but we were actually building social capital right there and then, among all of the summit participants. The format of the day, the retreat’s remote location, and the mobile signal-free environment were creating deepened relationships at the same time as developing our thinking.
By all accounts, the concept of Social Capital has been around for a while, as this Harvard Review article from 2001 shows. It is essentially a term that describes knowing and trusting people, a currency if you will, representing the depth of relationships between those we seek to do business with. And as HBR says “The term nicely captures the notion that investments in these relationships return real gains that show up on the bottom line.”
Like all forms of capital, Social Capital needs effective management. It suffers from depletion and requires continued attention and investment. With business travel booming in 2019, the level of investment in our relationships was high, and the Social Capital we had built was strong. As soon as the pandemic hit and travel stopped, the investment we had made in our relationships became invaluable as everyone leveraged relationships to keep their businesses alive. But the Social Capital we had built soon started to deplete, and we could feel it in our virtual interactions.
As we re-entered the world of travel, our compulsion to meet was unstoppable. We started to see not just why face-to-face was so important, but that the type of interaction and shared experience had a considerable effect on the level of Social Capital built and on the value of the trip taken.
So, Social Capital is a term that perfectly represents why meeting in person, and therefore travel, is so valuable and why we continue to struggle with the concept of ROI for trips. It’s because physical interaction and shared experience created through business travel and meetings may not actually result in an immediate financial benefit – it's an investment for the future.
American Express Global Business Travel CEO, Paul Abbott, has talked regularly in the media about the important role of travel in driving culture and the rise of travel from the gathering of teams due to remote workforces. And he’s right, but these aren't easy forms of travel to quantify the return in terms of immediate and direct, financial ROI. It’s hard to justify a single trip or team gathering in monetary terms each and every time.
But with the EU’s Corporate Sustainability Reporting Directive coming into play this year the focus on determining which travel types bring value to organisations will be under the spotlight, as companies seek to slash travel emissions. And with that, there’s a great opportunity for travel buyers to think more strategically about the value of travel in their organisations rather than focus on the operational delivery.
Smart companies will consider not just which trip types should or shouldn’t happen to drive their business, they will try to increase the impact of trips to amplify the purpose. Trying to help their people manage their Social Capital levels to deliver on both short and long-term objectives will be part of that equation. Knowing when to use virtual or in-person options will become a competitive advantage as will what format that face-to-face interaction takes.
Ever since I first heard the term, the concept of Social Capital has continued to enter my line of sight, in ever-increasing frequency. It featured heavily in a few of the GBTA Ladders pitches I was fortunate to hear last year, where teams from our industry focused on the importance of leveraging travel to deepen relationships and amplify the capital created. It has spawned several startups I have come across which co-incidentally are focused on the same challenges the GBTA Ladders teams faced. And it’s because of this that I believe it defines the era in which we now operate and will gain greater resonance in our sector in 2024. We’ll start to see the term enter regular industry vernacular and start to see companies define products and services that recognise and leverage the principle of Social Capital.
If you think business travel has been under the spotlight already, just wait to see what the next few years bring. Defining the value of travel against the impact it has 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 relationship, to help companies achieve their future objectives. Social Capital is what we are about. Relationships aren’t just valuable in our sector, they are the very reason we exist – to deepen relationships in all the sectors our industry serves.