The tide is finally starting to turn. Business travel is showing promising signs of recovery with companies around the world itching to get back on the road.

Singapore is no different. Our borders are slowly reopening. And limited travel is now possible on what the government calls ‘vaccinated travel lanes’ (VTLs). What does this mean concretely? Fully-vaccinated people travelling to VTL destinations on selected VTL flights can enter and exit Singapore without any mention of dreaded quarantines.

The impact of VTLs on booking and travel behaviour has certainly been an eye-opener. Over 85% of FCM customers have reported that they are now happy and confident to travel to VTL destinations.

Airfare pricing has also seen an interesting shake-up. Many people assume airfares have skyrocketed as a result of limited air capacity, but that is not necessarily true. Singapore Airlines has in fact reduced the cost of economy seats on VTL flights by an average of 60% – simply to stimulate demand. The price of business class tickets on the other hand, has increased by 15%, as airlines attempt to regain some revenue from businesses and individuals who are less price-sensitive.

All eyes on Germany

An incredible VTL case study is Germany. Travellers who have been in Germany for at least 21 days – or who have remained in Germany for their entire stay abroad – are now able to return to Singapore without quarantining. The only requirement is that they fly with Singapore Airlines or Lufthansa on designated VTL fights where where all passengers and crew fully vaccinated.

The immediate result is that travel to Germany almost doubled overnight. And bookings to Germany have seen an 89% boost in September as compared to August. Although it is still lagging when compared to volumes before the pandemic, it is a promising evolution.

Be smart about airline choice

The announcement of VTLs has also had a direct impact on airline choice. Very close to 100% of people travelling to Germany are now returning on VTL flights. Most travellers don’t hesitate to switch from non-VTL flights to either Singapore Airlines or Lufthansa flights to be able to forego quarantine requirements.

Client surveys reveal two clear reasons for this shift in trip purpose. Firstly, European expatriates who have been unable to leave Singapore are now travelling to Germany to visit family. Secondly, corporates who travel to Germany on business take advantage of the simplified rules to add a few days’ leisure to their trip.

A two-way street

VTLs are not a guarantee for increased demand. Brunei, another VTL destination, has not seen the same success as Germany. Bookings for Brunei have remained steady with only business travel on the cards.

There are several reasons for this, the most important one being that the VTL agreement with Brunei is not reciprocal. Added to this, is economic opportunity. Whilst Brunei is an oil-rich country, its economy is just 0.3% of the size of Germany’s economy.

Home visits and cross-border travel are also not as popular in Brunei. As part of the Schengen zone, Germany offers Europeans the opportunity to travel to the country to meet with family members and colleagues. In Brunei, things are different. The country’s borders remain closed to its neighbours, including Indonesia and Malaysia. This eliminates meetings with business relations and family from neighbouring countries. The population in Brunei is also much smaller, which means home visits are not as popular.