Corporate travel spending is tracking toward full recovery
to 2019 levels by 2024 or 2025, but higher costs and climate concerns will keep
trip volumes smaller than pre-pandemic levels in “real terms,”
according to a Deloitte study weighing responses from 334 corporate travel managers.
The study—conducted from Feb. 7 to Feb. 23 and consisting of
106 U.S. travel manager and 228 European travel managers, divided about evenly
between Spain, Germany, France and the U.K.—showed that spending volume should
reach about 57 percent of 2019 levels in the first half of this year and
increase to about 75 percent by the end of the year.
The growth, however, is coming amid “an environment of
higher airfares and room rates,” which means the actual number of trips
are lagging. A full recovery in business travel spending appears possible by
the end of 2024, but the corporate travel market would remain about 10 percent
to 20 percent below pre-pandemic levels accounting for inflation, according to
Overall recovery trajectories are similar for both U.S. and
European travel managers, although long-haul international trips are recovering
more quickly among U.S. companies, according to the survey. In the U.S., travel
managers said international travel would account for about a third of 2023
spending overall, which is similar to the share in 2019. In Europe, travel
managers expect 28 percent of spending to be on travel outside of Europe,
compared with 34 percent in 2019.
Suppliers Focused on Long-Term Relationships
While travel buyers are facing a tougher negotiating
environment with suppliers, most buyers said they are satisfied with their
results, though less so in Europe, according to the report. Sixty-three percent
of U.S. travel managers said their airline pricing was favorable, and 54
percent of European travel managers said the same. The responses were similar
for hotel agreements, according to Deloitte.
“In both regions, travel buyers generally believe that
suppliers are taking a long-term view of their relationships versus pressing
their advantage in the moment,” the report said.
Most buyers also said they are not limiting trip frequencies
due to higher cost and instead are asking travelers to book cheaper flights and
hotels, according to Deloitte.
Sustainability Initiatives to Redefine ‘Recovery’
More than 40 percent of buyers said they are working to reduce
their environment impact via corporate travel policy, though those efforts will
not curb travel this year. About one-seventh of U.S. travel managers and
one-fifth of European travel managers said their travel programs will see
sustainability-related reductions in 2023. Larger percentages are planning for
longer-term reductions, however, with about a third of U.S. travel managers and
40 percent of European travel mangers saying travel per employee will have to
decrease by 20 percent or more by 2030 to meet their sustainability targets.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)