Summer vacation is back for Wall Street and Silicon Valley. It could be their last before a recession.

The financial world is finally ready to move away from its desk after two years of life and work being blurred.

With booster shots in the arms and business travel on the rise, summer vacation permits were the hot ticket from Wall Street to Silicon Valley.

Increasingly, however, it also feels like the summer of 2022 could be a first and last getaway before a U.S. recession hits, with the Federal Reserve raising interest rates drastically and shares of SPX,
and bonds with a historically poor first half.

“It’s been difficult to get away from for a very long time,” said Joanna Wald, head of US small and mid-cap research at Schroders, a global investment manager. “If it feels like the entire last year and a half has been like this.”

While Wald’s has traveled twice from New York to London, Schroders SHNWF,
Headquarters, since the pandemic, there’s an upcoming trip to Colorado that will be her first vacation in a long time. “These trips were really complicated, but it was definitely worth it,” she said.

“I’m staying in the US this summer,” she said of an upcoming vacation. “I’ll check in but I’m confident this will be a real break.”

Empty offices, more crowded hotels

Investment firms large and small have significantly restricted their business travel during the pandemic, and many have kept their plans flexible to require employees to fully return to office buildings.

Office buildings were still more than half empty in the first week of July, according to Kastle Systems’ latest 10-city tracker, which reported an average occupancy rate of just 43.8%.

The rise of flexible working arrangements boded ill for many landlords of office buildings in big cities, but there may have been some silver linings for hotels.

“Because the office plans are so area-wide, it gives people a lot of flexibility,” said Jan Freitag, national director for hospitality market analytics at the CoStar Group.

“Working from home. Working from hotels. So much more is now possible with Zoom or Teams,” he said of the ubiquity of video conferencing instead of face-to-face chat.

While business travel has yet to recover from pre-pandemic levels, bookings for group rooms at upscale hotels rose to 7.5 million in May, Friday said, compared with a peak of 8.5 million in May 2019.

“I think that’s encouraging,” he said. “The question is whether things will come to a standstill.”

Past “Poison”

Wall Street may be bruised and battered, but it was a whole other level of disruption that saw some high-flying tech companies go from unprofitable ideas to unicorns to layoffs in a rapid cycle.

“The peak was March 2022,” said Eugene Zhang, founding partner and CEO of early-stage Silicon Valley venture capital firm TSVC. “Too much money went in there and distorted a lot,” he said via video chat.

“There was so much poison. The thinking was so bad,” he said. “I would sum it up as a much, much healthier environment now.”

Zhang’s TSVC specializes in investing in tech-focused startups, including Zoom ZM,
Carta and others. Although he has no plans to take off during the summer months, he has booked his first family holiday in two years in Spain for September.

“Right now we are in this transition or unknown phase,” he said, pointing to rising interest rates and rising prices that are affecting people’s spending capacities. “The economy will definitely suffer,” he said. “Take a vacation, but everyone has to face a new reality.”

Read: The sum is also increasing: Hemingway enthusiasts and other tourists in Spain encounter a significantly higher inflation rate than in the USA

Alternate Reality

For Boston-based portfolio manager Jack Janasiewicz, this summer will also be the first big summer since the pandemic from a vacation and business perspective.

Like Zhang, the senior portfolio strategist at Natixis Investment Managers Solutions spoke of a transition phase. With many customers still working with a hybrid model, this often means the option of a video chat, a slightly awkward meeting in a customer’s kitchen, or a visit to a coffee shop.

“It’s certainly a shift this year from the pre-pandemic,” he said of the old days when you mostly met people in their offices.

In his view, inflation could still be contained without wrecking the US economy, even though “the likelihood of a recession is rising.”

However, when the next one comes around, the financial world may be better prepared than in the past, as travel and entertainment budgets have already been slashed but technology spending has increased dramatically.

Wald von Schroders spoke about her company’s introduction of PROTO, a hologram technology that gives the feeling that colleagues are in the same room as you, but also leaves a smaller environmental footprint than constant air travel.

“I was surprised at how realistic that felt,” she said, recalling that when Schroders CEO Peter Harrison recently used the technology for a virtual meeting in New York, a visiting client reflexively shook his hand and then stopped.

Read: The US won’t officially be in recession if GDP starts contracting again – and here’s why