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Business Travel’s Rebound Is Being Hit by a Slowing Economy

By the early fall, domestic business travel was back up to nearly two-thirds of its prepandemic level. But companies have now begun to cut back.

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By Jane L. Levere

Business travel came back this year more strongly than most industry analysts had predicted in the depths of the pandemic, with domestic travel rebounding by this fall to about two-thirds of the 2019 level.

But in recent weeks, it appears to have hit a new hurdle — companies tightening their spending in a slowing economy.

Henry Harteveldt, a travel industry analyst for Atmosphere Research, said that corporate travel managers have told him in the last few weeks that companies have started to ban nonessential business travel and increase the number of executives needed to approve employee trips. He said he was now predicting that corporate travel would soften slightly for the rest of the year and probably remain tepid into the first quarter of 2023.

Mr. Harteveldt also said his conversations led him to believe that business travel would “come in below the levels airline executives discussed in their third-quarter earnings calls.”

Airlines were bullish on those earnings calls, a little over a month ago. Delta Air Lines, for one, said 90 percent of its corporate accounts “expect their travel to stay the same or increase” in the fourth quarter. United Airlines, too, said its strong third-quarter results suggested “durable trends for air travel demand that are more than fully offsetting any economic headwinds.”

Hotels, too, were optimistic. Christopher J. Nassetta, president and chief executive of Hilton, said on his earnings call that overall occupancy rates had reached more than 73 percent in the third quarter, with business travel showing growing strength.

The change in mood has come as the economy has more visibly slowed. Technology companies, in particular, have been announcing significant layoffs. Housing lenders have also been reducing staff, as rising mortgage rates cut into their business.

The travel industry has long relied on business travel for both its consistency and profitability, with companies often willing to spend more than leisure travelers. When the pandemic almost completely halted business travel in 2020, people were forced to meet via teleconference, and many analysts predicted that the industry would never fully recover.

But business travel did come back. As the economy reopened, companies realized that in-person meetings serve a purpose. In a survey taken in late September by the Global Business Travel Association, a trade group, corporate travel managers estimated that their employers’ business travel volume in their home countries was back up to 63 percent of prepandemic levels, and international business travel was at 50 percent of those levels.

One reason international business travel has not come back as strongly, Mr. Harteveldt said, is that some employers have imposed restrictions on high-priced business-class airline tickets for long-haul flights. He said employers are instead requiring travelers to take a cheaper connecting flight or to fly nonstop in premium economy or regular economy class.

“Travelers are telling managers they won’t fly long-haul in economy if they have to go directly to a meeting when they arrive,” Mr. Harteveldt said.

What will business travel look like in the next year?

Pandemic travel restrictions will probably play less of a role. A survey by Tourism Economics, U.S. Travel Association and J.D. Power released in October found that 42 percent of corporate executives had policies in place restricting business travel because of the pandemic, down from 50 percent in the second quarter. Over half expected pandemic-related business travel policies to be re-evaluated in the first half of 2023.

With Americans able to work remotely, many are combining professional and leisure travel, airline and hotel executives said on recent earnings calls. That was a big reason travel did not drop off in September, when the peak vacation period ended, as it used to in years past.

Jan Freitag, national director for hospitality market analytics at CoStar Group, said hotel occupancy by business travelers currently varies by market, with occupancies high in markets like Nashville, Miami and Tampa, Fla. — places where business travelers may well be taking “bleisure” trips. But hotel occupancies by business travelers are low in markets like Minneapolis, San Francisco and Houston.

Mr. Freitag said the lower hotel occupancies in some cities may reflect a lower return-to-office rate in those places, which reduces the ability to have in-person business meetings.

Mr. Freitag said he was “very bullish on group travel, trips for meetings, association events, to build internal culture.” Those trips will recover more quickly, he predicted, than individual business travel.

“It’s all about building relationships,” he said. “It’s very hard to do that online.”

On the other hand, short business meetings and employee training sessions may continue to be conducted online, which is less expensive than in person, said Grant Caplan, president of Procurigence, a consulting firm in Houston that advises companies on their spending for business travel, meetings and events.

Even as business travel has resumed, hotels, airlines and airports still have inadequate staffing. A survey of hoteliers by the American Hotel and Lodging Association, a trade group, released in October found that 87 percent of respondents were experiencing staffing shortages. Although that was an improvement over May , when 97 percent of respondents said they were short-staffed, the current findings do not bode well for smooth hotel stays.

Disruptions in flying, particularly in the United States and Europe — because of weather delays, inadequate flight crews or air traffic control and security issues at airports — have been notoriously high, particularly earlier this year.

Although “we can’t say that these disruptions have discouraged business travel, they have clearly complicated” the experience for travelers, said Kathy Bedell, senior vice president of the Americas and affiliate program for BCD Travel, a travel management company.

Kellie Kessler, a pharmaceutical clinical researcher in Raleigh, N.C., said the travel disruptions she faced this year were too much. She changed jobs recently to take one that requires her to travel on business 10 percent of the time, compared with 80 percent in her previous position.

“The reason I took a nontravel position is that I can count on one hand the number of on-time flights I had this year,” she said.

And flight disruptions have led to a decline in some road warriors’ loyalty to airlines, even those who have accrued elite status in the carriers’ frequent-flier programs.

“The disruptions overall have caused me to be less loyal to any one airline,” said Trey Thriffiley, chief executive of QIS Aviation Group a consulting company in Savannah, Ga., that advises individuals and companies about their use of private jets. He is also an elite member of the loyalty programs at Delta, United and American Airlines. “Instead of searching by preferred airline or even cheapest price,” he said, “I search for direct flights or connecting flights to cities closest to where I live that I can drive home from if I need to.”

Airlines’ bullish forecasts notwithstanding, some experts find prospects for business travel this fall and next year extremely murky.

They say they cannot accurately predict how strong business travel will be and what airfares and hotel room rates will look like because of many unknowns, including the duration of the war in Ukraine and its impact on the European and global economies; increasing gasoline and jet fuel prices; and rising inflation, recession fears and political uncertainty.

Mr. Harteveldt, the travel industry analyst, said the recovery of business travel varies by geographic region, with the United States rebounding faster than Europe.

He said the Chinese government could be using its reopening strategy “in a geopolitical way,” adding, “If a country is more friendly, China will grant access to that country’s business and leisure travelers rather than to travelers from countries with which China has greater political differences.”

He predicted that 2023 would be a “difficult year” for business travel unless the war in Ukraine “comes to an abrupt end and there is more certainty about oil and the price of jet fuel.” Also a factor, he said, could be decisions by companies that may have added too much staff during the pandemic to save money by reducing business travel rather than by laying people off.

“If there’s a symbol that can be used to describe the outlook for business travel in 2023, it’s a question mark,” he said. “No airline, travel management company or travel manager can be 100 percent certain what 2023 will bring right now. It’s one of the most confounding, confusing times to be in business travel, perhaps in decades.”

In a report issued in August, Mike Eggleton, director of research and intelligence at BCD Travel, had a similar take on the immediate future for business travel. “Producing a credible travel pricing forecast in the current environment is incredibly difficult,” he wrote. “The near-term travel outlook is more uncertain than ever. Volatility has never been so high and seems likely to persist. There’s vast variation in market performance and outlook.”

Going forward, Ms. Bedell said, perhaps the overriding question about business travel will be whether the trip is necessary.

“Client-facing and revenue-generating travel is taking a priority over internal meetings,” she said.

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• Dec 21, 2022

2023 Outlook: Business Travel Bounces Back

Corporate travel budgets are recovering to pre-covid levels, our new survey finds. see where companies are spending in the year ahead..

After grinding to a near halt during the COVID-19 pandemic, business trips—and profits for hotels and airlines catering to higher-paying corporate clients—are bouncing back even beyond pre-pandemic levels, per a recent survey from Morgan Stanley Research.

Despite higher airfares and room rates, the survey of 100 global corporate travel managers found that many respondents believe their company's travel expenditures are already back to pre-pandemic levels and will continue to grow. The biggest demand is coming from small companies, which means lower-cost airlines may benefit the more than their bigger peers.

“Travel budgets are expected to see a noticeable improvement in 2022, with 2023 nearly back to ‘normal,’” says Ravi Shanker, an equity analyst covering North American transportation.  “Most interesting is that nearly half of the respondents expect 2023 budgets to increase versus 2019 overall. And of those that expect an increase in budgets, the majority believe 2023 budgets will be between 6% to 10% higher than 2019.”

Overall travel budgets show an improvement over previous surveys, with 2023 budgets expected to be 98% of 2019 levels on average.

Survey Highlights

•   Smaller companies lead demand for corporate travel. More than two-thirds (68%) of companies with under $1 billion in annual revenue expect travel budgets to increase next year, versus just 41% of companies with annual revenues over $16 billion. Similarly, 32% of smaller companies said travel budgets had returned to pre-pandemic levels compared with 23% of big firms. “This trend could likely favor low-cost carriers, as smaller enterprises tend to be more localized and require less long-haul travel,” says Shanker. “However, the legacy carriers with strong corporate exposure should see gains as well.”  

Nearly a quarter of both large and small companies say their firms are already back to pre-COVID travel levels, and 34% anticipate a full recovery by the end of 2023.

ESG Rate of Change

Holiday budgets hit by inflation, seeing a peak for food prices.

•   Airfares are higher, but that’s not a drag on bookings. On average, corporate airfares are expected to be about 9% higher than pre-pandemic prices. “Clearly the expected increase in corporate airfares is not having a major impact on corporate travel as passenger volume is expected to be basically flat versus 2019,” says Shanker.
• Room rates will continue to rise, though not as fast as they have recently. As of this October, market room rates had spiked 20% to 25% over 2019. Next year they will rise even more, though by an average of just 8%, say respondents (9% in the U.S. and U.K.; 5% to 6% in Latin America, Asia and Africa).
• Hotels face economic and competitive headwinds. While overall travel budgets are growing, companies are cutting costs by trading down when it comes to accommodations. (Historically, budget hotels outperform upscale lodging in tough economic times.) Alternative sources of accommodation also threaten traditional hotels, with 31% of respondents saying they intend to use short-term rental services in the next year.
• Virtual meetings aren’t going away.  Almost 18% of corporate travel will be replaced with virtual meetings, falling slightly to 17% in 2024, suggesting a degree of permanence in the shift with companies recognizing the benefits of virtual meetings ranging from cost savings to lower carbon footprints. Expect companies providing collaboration software to gain from this shift.

For more Morgan Stanley Research insights and analysis on global travel, ask your Morgan Stanley representative or Financial Advisor for the full reports, “Global Corporate Travel Survey: Snapping Back" (Nov. 8, 2022) and “Global Corporate Travel Survey: 2023 Travel Budgets Nearly Back to 2019 Levels, but ~20% of Meetings Could Still Shift to Virtual” (Nov. 8. 2022). Morgan Stanley Research clients can access the reports directly here and here . Plus more Ideas from Morgan Stanley’s thought leaders.

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Skift Research Global Travel Outlook 2024

Seth Borko, Varsha Arora, Pranavi Agarwal, Ashab Rizvi, Saniya Zanpure + Skift Team

Report Overview

The watchword for 2024 is normalization. We expect that overall travel industry revenue growth will decelerate from eye-watering double digits. But this slow-down is not a sign of weakness. Rather it is a sign of the continued strength of the travel industry as business finally gets back to normal. ​

Economic conditions appear poised to support further consumer spending. And even though there are some clouds on the horizon, shifts in consumer behavior that prioritize travel over other spending, should help deliver growth for our industry. Expect Asia to experience strong growth, as it finally stretches its legs after prolonged lockdowns. Capacity constraints are from over, but ironically can help support travel’s pricing power. We see room for growth from hotels to airlines.

This year our flagship piece includes more data than ever before. The core estimates you will find in this piece are for international trips out to 2028 and 2024 revenue forecasts for the hotel, airline, online travel, short-term rental, and cruise industry.​

On top of that we have included sector-specific analysis and  insights into how economics, demographics, and consumer trends will shape travel into 2024 and beyond. ​

We hope you enjoy! ​

What You'll Learn From This Report

• International Travel Forecast, 2023-2028​
• Online Travel Revenue and Gross Bookings Forecast, 2023-2025​
• Hotel Revenue Forecast, 2023-2025​
• Short-Term Rental Revenue Forecast, 2023-2025​
• Airline Passenger Revenue Forecast, 2023-2024​
• Economic and Demographic Factors Driving Travel in 2024​
• Key Consumer and Business Trends that Will Impact Travel

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17 January 2023

2023 Business Travel Outlook

What a difference 12 months can make in travel. we commence 2023 with a much-welcomed sense of normalcy and familiarity in the travel experience, with traveler confidence, demand, and activity fast returning to pre-pandemic levels. businesses have now shifted their focus away from pandemic travel considerations, and towards a more acute focus on regional economic impacts that may influence the form and function of the travel program’s strategy and budget..

As we enter the new year, we welcome the much-anticipated re-opening of China, the ‘final piece of the jigsaw puzzle’ creating a truly reconnected world. We expect China’s re-opening to add critical airline competition in regional and international markets in 2023, putting downward pressure on unsustainably high international airfare prices as extra services and seat capacity extends into the US, European and Australasian markets.

In our 2023 Business Travel Outlook , we share some of the latest global travel industry research alongside Corporate Travel Management (CTM) leaders’ expert insights to explore the key trends impacting travel pricing, technology, and sustainability in 2023 and beyond.

2023 Business Travel Snapshot

One of our key takeaways from the last few years of travel is learning from disruption and how our customers and their travelers continue to evolve, adapt and embrace new opportunities for engagement, collaboration, and growth.

According to research conducted by the Global Business Travel Association ( GBTA ) [1] released in October 2022, “ Economic considerations have eclipsed COVID concerns for the industry, but a majority of companies are not limiting their business travel specifically due to economic concerns.” Despite this shift in focus, the survey showed strong ongoing demand for business travel activity in 2023:

• 75% of Travel Managers said their company had no immediate plans to limit business travel because of economic concerns.
• 78% of Travel Managers expect the number of business trips taken by employees at their company will be higher or much higher in 2023 versus 2022.
• 80% of travel suppliers expect travel spending by corporate clients will be higher or much higher in 2023 .
• 66% of Travel Managers anticipate that their company will conduct more internal travel (colleague meetings or regional office travel)  and 67% expect more non-internal travel (sales meetings/conference travel)in 2023 compared to 2022.
• 72% of respondents do not expect remote/flexible work models to impact the number of business trips taken by their employees. Additionally, 14% expect it will lead to more business travel .

[1] GBTA business travel recovery poll results – October 2022.

Supplier Snapshot

2023 will be a year of increased airline capacity and resources, improved service offerings, and new routes – better connecting our world. Setting the tone for an exciting year ahead, our teams are already witnessing a broad range of enhancements to supply services and routes across all CTM operating regions, positively impacting the way our customers travel.

• Hong Kong fully reopened its borders with China on the 8 th of January, allowing 60,000 Hong Kong travelers to enter mainland China daily.
• Air China :  Doubling Hong Kong – Bejing flight services from twice to four times per week.
• China Southern: Resuming Hong Kong services to various key China routes commencing from the 12 th of January.
• Cathay Pacific:   Cathay Pacific will more than double its flights into the Chinese Mainland, operating 61 return flights per week between Hong Kong and 13 Mainland cities from 14 January 2023.
• Hong Kong Airlines: Plan to hire 1,000 workers and boost its number of flights as it seeks to reach 75% of its operating capacity by the end of 2023 .

Australia & New Zealand

• Qantas and Virgin Australia: Announcing additional capacity increases for the end of March/April which will see an additional 10% domestic capacity to the market.
• Virgin Australia: Introducing a new direct Cairns to Tokyo service commencing in late June.
• Singapore Airlines: Reintroducing their A380s into Melbourne to operate double daily flights effective mid-May. This will bring their capacity back to 76% of pre-COVID.
• With China reopening , major Chinese carriers will be recommencing flights with Air China restarting Sydney services in early February with an initial offering of 3 flights per week.
• Emirates: Commencing February, Melbourne will become the second Australian destination to be served with the signature Emirates A380 featuring Premium Economy.

North America

• Delta airlines: Overall flight capacity in 1Q23 is expected to be only 1% down from 2019 levels.
• Airline resourcing: In response to challenges around service resumption, collectively U.S. airlines have now employed the most employees in nearly two decades.
• Rebound in air traffic between the U.S. and China is expected in late 1Q23 subject to government approval.
• American Airlines : Resuming non-stop flights to Shanghai from Dallas Forth Worth twice a week commencing late March.
• United Airlines: Implementing a large expansion of its North Atlantic schedule including 3 new routes to and from Newark and Malaga, Stockholm, and Dubai. United’s total Trans-Atlantic capacity is expected to be 10% over 2022 and 30% over 2019 levels.
• Air France and KLM: Flight capacity is back to 93% of 2019 levels. New routes are commencing and returning in 1Q23 including Aarhus, Innsbruck, and Salzburg, and increasing flights to China, Hong Kong, and Singapore.
• British Airways: Growth is predicted for North America where the airline will service 27 U.S. destinations from London commencing in the summer of 2023.
• United Airlines: Increasing their daily flights from 17 to 23 between the UK and North America by the end of 1Q23. This includes a second daily service between Heathrow and Los Angeles, in addition to a daily service to Boston.
• Air Canada: Capacity is back to 95% of pre-pandemic levels, including all routes from the UK except services between Heathrow and Ottawa. This service is not likely to return before 2024.
• Lufthansa Group: There is a focus on regional flights with Bristol-Zurich returning from the 4 th of February and Gatwick-Frankfurt / Belfast-Frankfurt returning on the 23 rd of April 2023. Lufthansa is also rolling out their long-haul product ‘Allegris’ during 2023 which will have a First Class Suite, a new Business Class Suite, and a Premium Economy product.

Business Travel Trends

At CTM, we continue to witness exciting developments in the way our customers travel for business and leisure, from their servicing needs and communications channels to technology adoption and content choices. 2023 is set to be no different, with many exciting new trends arising which will pave the way for more effective, more sustainable, and more personalized travel solutions in the year ahead.

CTM’s leaders share their insights and views on the key trends shaping travel program development and innovation in the travel industry in 2023.

Technology & Innovation

It is no secret that 2022 presented widespread resourcing challenges across the travel industry, as the rebound in travel activity out-paced recruitment and onboarding of staff across agent and airline service teams, airport services and security, and hoteliers. This challenge provided an opportunity for travel and hospitality businesses to innovate the way they provide service to travelers, with advancements in the use of robotics, AI, and automation becoming key drivers to overcoming the industry’s resourcing challenges in 2023 and beyond.

Automation and AI will continue to change and enhance the way travel management companies (TMCs) deliver services and solutions to travelers throughout every step of the travel management experience and for every travel stakeholder. From trip research to travel booking, navigating airport processes, and in-trip experiences, technology has the power to deliver exceptional outcomes for customers at greater speeds, with more relevance and heightened personalization by automating manual processes. In turn, automation will allow greater capacity for human expertise to focus on managing more complex travel requirements, presenting a win-win-win scenario for travelers, corporate customers, and the travel industry in general.

CTM’s Global Chief Technology Officer, Mike Kubasik explains how hyper-automation and robotics are transforming the travel and travel management experience:

“Hyper-automation involves the orchestrated use of multiple technologies, tools or platforms such as AI, machine learning, robotic process automation (RPA), integration platforms and low-code/no-code tools, to deliver high-speed outcomes via the users’ choice of service channel – whether that’s email, chat, in-app or phone.

“This type of technology investment behind the scenes will have a significant impact on the front-line traveler and travel arranger experience, as traditional booking and in-trip processes become faster and more relevant for customers. The use of hyper-automation enables us to identify, vet and automate processes, which frees up Travel Advisors’ time to focus on more complex service-related tasks. As advanced automation and AI continue to be built into the booking experience, through online booking tools and the tools our Travel Advisors use to make offline bookings and service requests, it will ensure every avenue for booking and trip management is optimized for speed, relevance, and personal preference, all of which support increased customer satisfaction and efficiency.”

2023 will be an important year for sustainability across the travel industry, as travel continues to demonstrate its role as a strategic enabler to reaching 2030 sustainability targets. Organizations globally now increasingly rely on TMCs to support the delivery of their sustainability objective and targets through sustainable travel solutions.

Business travel can play a positive and important role in supporting businesses to reach their sustainability targets, by reducing carbon emissions through the choice of environmentally-focused suppliers and travel options, including rail and electric vehicles, and by promoting sustainable travel practices, such as the use of locally engaged suppliers and enterprises that support community prosperity through employment and local sourcing of materials and products.

CTM’s Global Head of ESG & Sustainability, John Nicholls explains:

“Social connection is a new travel trend in 2023, and one which requires social health and well-being enhancements across airlines, hoteliers, and car hire, in alignment with the UN Social Development Goals (SDGs). Corporate travel buyers and managers need to embrace local and social connections as part of their sustainability purpose to enhance the prosperity of people and communities.”

In 2023, we can expect to see an increase in collaborative partnerships between corporate clients, TMCs, and supply partners to deliver proactive sustainability benefits, with a continued focus on reducing and/or abating carbon footprints, advancements in the online booking experience to support sustainable travel booking behaviors, and widespread access to sustainable travel data that will support and enhance sustainable travel program development.

There has been much focus recently on the development of Sustainable Aviation Fuels (SAF) as a leading solution to reduce airline emissions to meet Net Zero Targets. However, the scope of impact remains constrained by infrastructure, manufacturing and distribution limitations. We expect to see continued SAF investment across industry and airlines in 2023 and beyond, which will need to be coupled with Government support to overcome infrastructure and supply constraints.

Supply & Content

Traveler expectations are increasing and, as such, the traveler experience will be increasingly important in 2023. Suppliers will be seeking to retain and gain new customers not just by simply offering low prices, but equally by providing additional value through their services and experiences.

We can expect to see the airline industry recover and gain momentum in 2023. The International Air Transport Association (IATA) has predicted that the airline industry could return to profit in 2023 as travel demand continues to build momentum.

The travel experience will continue to be a focal point in 2023, with airports and airlines continuing to navigate traveler expectations and remedy the pain points (cancellations, lost baggage, heightened screening, and security) around the passenger journey.

According to CAPA Centre for Aviation, traveler expectations have created a competitive landscape for airlines where experiences will be key to securing new customers. Travelers will be looking for more – whether that’s the best in-flight experience or premium class services – and will be willing to pay more for those services should they be deemed ‘valuable’.

Personalization is gaining momentum. Measuring ‘value’ in hotel programs is no longer just about cost, but also the value in demonstrating sustainability practices as well as knowing unique traveler preferences and delivering personalized experiences – including additional amenities, welcome gifts, pillow menus, and customized messages.

Hotels are also adapting to the remote worker movement, ensuring their facilities can accommodate co-working spaces, fast Wi-Fi, and meeting spaces, and adopting new technologies to service guests, whether through mobile check-in or virtual concierge chatbots that provide customer service around the clock.

Following meteoric growth in 2022, we expect hotel average daily rates (ADRs) in key markets to show some stabilization in 2023 as price elasticity increases and capacity and resourcing constraints level out. In markets still recovering from COVID-19, we expect to see some moderate ADR gains in 2023.

Meetings & Events

Many businesses are continuing to adapt to the unique needs, challenges, and opportunities presented by operating a more decentralized workforce. This global shift in workplace environments continues to challenge the way businesses and their employees connect and collaborate to drive strategic outcomes. Ultimately, we can expect to see growing demand for more frequent, small-group, and in-person collaboration between both internal and external stakeholders, putting pressure on venues and business services in key hub locations.

Advanced bookings will be key to controlling budgets while maintaining maximum choice and relevance for meetings venues. Additionally, companies and Travel Managers will need to be creative in their development of engaging and strategically planned meetings, and in motivating employees in a more decentralized work environment in 2023.

Event Travel Management (ETM) Global Strategic Lead, Tracey Edwards explains:

“ Booking well in advance to meet expectations around the destination and budget will be of high importance going into 2023 with the high venue and accommodation demand. We are seeing savings of up to 40% on venues when booked more than 6 months in advance. There are however more benefits to booking in advance above and beyond securing availability.

“Equally, exploring opportunities to motivate, connect and reward employees will be key to attracting and retaining employees, from the frequency and style of face-to-face meetings to large group conferences and events. We are seeing an increased demand for incentive travel programs across our customer portfolio as an effective way to reward performance, build connections, and memorable one-in-a-lifetime experiences that are unique to the company and culture.

“The ability to plan an entire event experience for attendees that makes the most of the chosen destination, building in cultural experiences, meeting sustainability goals and tying back to the purpose of the meeting, incentive or event will also be important.”

In Conclusion

Our travel teams in every region continue to work closely with industry partners, customers, and our employees to ensure our services meet and exceed the needs of tomorrow’s travel environment. As we embark on 2023, we look forward to working with our customers and prospective customers to evolve and elevate their travel programs to embrace the opportunities of the new travel environment and to deliver more effective travel outcomes that drive business success.

Eager to find out more about the 2023 Business Travel Outlook?

Contact our expert travel team today to discuss your travel needs.

Related Articles

Corporate Travel Management Year in Review – 2022

Business travel insights & trends – 2022

Business Travel landscape: Your guide to travel program evolution

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Internova travel group survey shows positive outlook for business travel in 2024.

The Internova Index reveals trends and insights gleaned from millions of travel bookings, survey of business travelers in U.S., Canada

NEW YORK , May 9, 2024 /PRNewswire/ -- The demand for business travel remains robust according to the  2024 Internova Index: North American Business Traveler Insights , a new survey of travel trends conducted by Internova Travel Group.

Eighty-five percent of business travelers surveyed expect to be on the road the same amount or more often in 2024 versus 2023. About 30 percent combine leisure with business travel, or "bleisure." The average daily rate (ADR) for hotels booked by business travelers in the United States grew about 5 percent from 2022 to 2023. And post-COVID, travel agencies are playing an increasingly important role in booking business trips.

North American Business Traveler Insights is the first corporate travel-focused version of The Internova Index: North American Traveler Insights series, which will be published annually. It is based on an analysis of millions of travel bookings in the United States and Canada , as well as a consumer survey of approximately 3,000 travelers.

The study separates business travelers into three segments: Executives, employees in senior management positions; Road Warriors, high-frequency travelers in areas such as sales, account management, training or other interaction-focused roles; and Occasional Travelers, where travel is not a core part of their role.

"Our newest Internova Index report presents a carefully researched and hopeful outlook for business travel in 2024," said J.D. O'Hara, CEO, Internova Travel Group, one of the world's largest travel services companies. "It's clear that our business travel clients appreciate the vital assistance we gave them during and after the pandemic, and they are relying on us in ever-increasing numbers to provide the same high level of expert service, no matter where their work takes them."

While the overall number of trips per business traveler grew 3 percent from 2022 to 2023, the strongest growth was among Road Warriors, whose domestic trips increased by 30 percent. Overall, 30 percent of all business travelers expect to travel more in 2024 than they did in 2023.

Since 2019, agencies are playing an increasingly important role in booking business travel. This trend was likely driven by the complexity of planning travel during and shortly after the pandemic, and it is a change that has persisted. Road Warriors in particular are 15 percent more likely to use a travel management company (either an online booking tool or a human agent) in 2024 than in 2019.

The 2024 Internova Index: North American Business Traveler Insights was compiled by Internova Analytics and Consulting, a group within Internova Travel Group that combines unique data sources, knowledgeable internal expertise and an experienced project delivery team. The report is designed to highlight key industry trends for our supplier partners, members, advisors and colleagues with a focus on corporate travel. Through bespoke engagements, Internova Analytics and Consulting helps participants in the travel industry adapt to new trends and address their most pressing challenges.

"Last year, our team of analysts, consultants and travel experts harnessed our proprietary data to release the first Internova Index, focusing on general travel trends," said Henry Gilroy , Senior Vice President, Strategic Development, Internova Travel Group. "We're excited to expand more into the corporate space and demonstrate to our partners that we can support their analytical needs across all segments of the market."

For the full report or for more information on Internova Analytics and Consulting, please visit www.internova.com/research .

About Internova Travel Group Internova Travel Group  is one of the largest travel services companies in the world with a collection of leading brands delivering high-touch, personal travel expertise to leisure and corporate clients. Internova manages leisure, business and franchise firms through a portfolio of distinctive divisions. Internova represents more than 100,000 travel advisors in over 6,000 company-owned and affiliated locations predominantly in the United States , Canada and the United Kingdom , with a presence in more than 80 countries.

CONTACT: Elizabeth Gaerlan [email protected]   1-212-944-1125

View original content to download multimedia: https://www.prnewswire.com/news-releases/internova-travel-group-survey-shows-positive-outlook-for-business-travel-in-2024-302141395.html

SOURCE Internova Travel Group

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Airbnb posts biggest decline in a year on weak travel outlook

A irbnb shares slid by the most in a year after the home rental company gave lackluster guidance for a second straight quarter, indicating that growth in travel spending will slow ahead of the peak summer season.

Revenue for the current quarter ending in June will be $2.68 billion to $2.74 billion, the company said Wednesday in a letter to shareholders. Analysts had been expecting $2.74 billion. In its statement, Airbnb blamed the earlier timing of the 2024 Easter holiday, as well as currency headwinds.

The stock was down 6.87 percent Thursday, its biggest drop since May 10, 2023.

Airbnb and its rivals have been working to establish a new normal since the world emerged from the COVID-19 pandemic. The industry’s recovery has been choppy, with demand growing faster in some regions and tapering off in others due to the different pace of reopening from lockdowns. Last week, Booking Holdings Inc. gave worse-than-expected guidance and Expedia Group Inc. issued disappointing results.

Airbnb, which specializes in shared homes and vacation rentals both in urban cities and rural destinations, saw a deceleration in North American nights booked in the first quarter. It has been making an effort through its marketing to differentiate its rentals from hotels in the hopes that people traveling in groups will opt to rent homes with multiple bedrooms. The company said that bookings for groups of six or more people were the fastest-growing segment in the region.

Growth in the current period for nights and experiences booked — a key industry metric — will be “relatively stable” compared with the 9.5 percent gain it posted in the first quarter. That falls short of analysts’ expectations for a roughly 12 percent increase. It also represents the slowest rate of growth since 2020, suggesting that overall demand has normalized after an initial post-pandemic travel boom.

The outlook overshadowed an otherwise better-than-expected report for the first quarter, which saw revenue surpass estimates, growing 18 percent to $2.14 billion thanks to particularly strong gains in Asia and Latin America.

The company is expecting revenue growth to re-accelerate in the third quarter, as key international events like the summer Olympics in Paris and the Euro Cup in Germany are fueling travel demand in the peak summer season.

The continued recovery in international travel has been a bright spot for the travel industry including Airbnb, whose businesses in Latin America and Asia have seen faster growth than in the United States. It has also been investing more in less mature markets in those regions to drive near-term gains, including the introduction of limited-edition stays inspired by local cultural icons.

Chief executive Brian Chesky has said that the company he cofounded in 2007 is ready to expand beyond its core product after spending the past year refining existing offerings. In particular, the company has been focused on making listings more reliable and affordable for guests, as well as encouraging more people to host.

That work has been paying off. The number of active listings in the first quarter grew 15 percent year-over-year and supply has continued to grow at a double-digit pace across all regions. That’s in spite of the company removing thousands of listings in the first quarter that did not meet guest expectations.

But Wall Street analysts looking for new, non-core products to drive revenue growth may have to wait a bit longer. Chief business officer Dave Stephenson has signaled that additional ventures could include a different type of marketplace on Airbnb later this year or next, which will offer cleaning and maintenance services, airport rides, or even private chef or sommelier sessions. Chesky has also said he will share more details on the company’s use of artificial intelligence later this year.

Human-sounding AI can plan, help book your travel. But can you trust it?

It wasn’t so long ago that travelers planned trips without the internet.

“Back in the day, our parents used to go to these travel agents and really kind of express what they were looking for and what kind of vacation they wanted,” said Saad Saeed, co-founder and CEO of Layla, an AI travel planner whose website launched this year. “Slowly, we kind of acclimatized ourselves to start using these search boxes, clicks, these forms and filters.”

Artificial intelligence-driven tools like Layla can now turn back the clock on that experience, engaging with users almost like humans to customize travel plans with lightning speed plus all the resources of the web. But does AI actually make travel planning easier and can it compare to human expertise? 

Yes and no. Here’s why.

Can AI actually understand us?

It can try. 

“What are you personally looking for in this trip and what do you want out of it?” asked Saeed. “Do you want to reconnect with your partner, for example, or do you want to just feel some adventure and thrill?” 

A human travel agent may ask a series of questions to understand a client’s needs. So can generative AI , which picks up on keywords. Mindtrip, an AI planner launched publicly on May 1, has an actual travel quiz that asks users to rank priorities like “Is your ideal vacation day an exhilarating adventure or a relaxing break?” using sliding scales.

“What we get at the end of that quiz, using the AI, is a really customized description,” explained  Mindtrip Founder and CEO Andy Moss. That then informs what the AI suggests to the traveler. 

Informed suggestions can save users time in narrowing down destinations and experiences, as well as  introduce places users may never have discovered on their own.

AI travel planning is here: How to use it to plan your next vacation and what you should know first

Can AI fully replace humans?

No. Layla may sound human, using conversational phrases like “I've got three cozy nests that won't make your wallet cry.”

“She has a personality. We try to make her funny and so on, where it's really that friend that can get to know you and then recommend you the perfect stuff,” Saeed said.

But part of Layla’s expertise comes from the real-life experiences of some 1,600 travel content creators  the Berlin-based platform has partnered with. Their videos and insights can give users a richer picture of what to expect.

Mindtrip also leans on human expertise, having tapped a limited group of travel influencers for curated content with plans to eventually open it up so anyone can share their travel itineraries and experiences with the public.

Story continues below.

Is AI a threat to privacy?

With all the rapid advancements in AI in just the past year, some users are wary of its safety .

“Data privacy is definitely one of our biggest concerns, and we ensure that none of the personal identifiable information ever reaches basically the model providers. That will all stay with us,” Layla’s Saeed said. “None of their personally identifiable data can ever be basically used to profile them or basically go into any of these systems, which are training these different models.”

Booz Allen Hamilton, the nation’s largest provider of AI to the federal government , focuses heavily on ethical and  secure AI, as well as adhering to the government’s policies on data collection. 

“We collect as little information as we can in order to provide a secure transaction,” said Booz Allen Hamilton Senior Vice President Will Healy, who heads up their recreation work, including Recreaton.gov , the government’s central travel planning site for public lands like national parks. “We don't save your searches. We don't save your credit card data. We're very careful about the data that we store.”

Yoon Kim, an assistant professor in MIT’s Electrical Engineering and Computer Science Department and Computer Science and Artificial Intelligence Laboratory , isn’t too worried about security in the initial brainstorming stages of travel planning with AI.

“I don't see, at this point, how AI-generated advice is spiritually different from travel guide articles that you might read on certain websites,” he said. “Travel planning is one really nice use case of these models, as narrow as it is, because it's a scenario in which you want to be given ideas but you don't actually need to commit to them.” 

What’s next for AI? 

Things could be different, though, if AI is used beyond trip planning. Deloitte sees AI being woven into all parts of travel.

“There is an opportunity for a real engine – I'm going to just use a generic term, engine – that allows you to search and pull it all together and to sort based off of your personal reasons for prioritization and then not stopping at ‘hey give me a list’ or ‘here's what to do,’ but ‘OK, now go create my itinerary, help me book it, track it all the way through that travel process,” said Matt Soderberg, principal, U.S. airlines leader for Deloitte. 

Deloitte’s Facing travel’s future report, released in early April, identifies seven stages where AI can intersect with a trip, from personalized recommendations based on past travel, online purchases and tendencies to day-of issues to a post-travel pulse, where travelers may be asked about their experience and start thinking about future trips. 

“When you solve across all of those, that's going to be the Holy Grail,” Soderberg said. “The difficulty is that doesn't all sit in one place. And so how do you get the right information and the right data to bring all of that together for a single experience for the consumer? And who's going to own that?”

Layla and Mindtrip, among others, already offer booking through partners like Booking.com. “It's all about making things actionable,” Moss said.

But for now, if issues come up mid-trip, AI tools can’t fix them like humans can. Humans still have to get involved.