Source : Business travel could rise by 8% to 12% this year, David McCann, CFO, July 24, 2024
Despite higher travel prices, companies are returning to in-person interactions.
While the volume of U.S. leisure travel came back fairly quickly post-pandemic, business travel remained significantly curtailed for some time. Now, though, the wheels are finally turning.
Corporate travel spend could step up by 8% to 12% this year, based on results from a pair of surveys by Deloitte, which queried 104 U.S.-based corporate travel managers and 1,389 U.S.-based business travelers.
Why are companies traveling more ?
Share of respondent compagnies increasing spend in 2024, by travel type.
Among the travel managers, almost three quarters (73%) said they expect travel budgets to be higher this year. Overall, they forecast that spending will surpass 70% of 2019 levels by the end of this year and come near those levels by late 2025.
Among the travelers, 20% said they expect to take six to 10 business trips this year, and 10% of them said they’ll take more than 10 trips.
The uptick in corporate travel is occurring despite higher travel prices. Four in 10 travel managers cited the rising costs as among their companies’ top two travel deterrents. And 50% of travel managers said pricing pressure has led them to encourage or mandate lower-cost flights, while 38% are doing the same with hotel spend.
“Airlines and hotels have not been particularly understanding,” Deloitte wrote in its survey report. It noted that according to travel managers, the suppliers have moved slightly toward tougher negotiating stances this year.
These cost challenges “come amid growing pressures for travel managers to deliver more on some fronts that can drive up costs — more comfort for travelers, more sustainable trips, and more flexible bookings,” Deloitte said.
By the book
An important consideration for a company’s travel spend is influencing travelers to book flights and hotels through company-approved booking tools or agents. According to the research, even among business travelers who are aware of a corporate booking tool, 44% book through unmanaged channels.
Perhaps counter-intuitively, such rogue bookings are “not led by young employees turning to slicker consumer tech,” Deloitte noted. Survey results indicated that older workers — baby boomers and Gen Xers — are significantly less likely than their younger colleagues always to use managed channels.
Generational divide
Business travelers of different ages were asked: How often do you use managed channels when making travel bookings?
Some other survey findings:
- “Return to office” is still cited as a driver of increased travel, as companies’ balance of remote, in-office, and hybrid work continues to stabilize post-pandemic.
- Conferences, trade shows, and exhibitions are playing a big role in travel growth, and more than 60% of business travelers expect to attend at least one in 2024.
- Travel managers reported solid progress over the past year on the sustainability front. “On the airline side, there is a notable shift to support sustainable aviation fuel over flight-by-flight emissions comparisons,” Deloitte wrote. “On the lodging side, certifications are increasingly appearing in the booking path, but chainwide initiatives are getting more attention.”
