Cost of business travel expected to increase through 2023, report says
Passengers wait for their flight with their luggage at Heathrow Airport in London
Luke MacGregor | Reuters
The cost of business travel, from hotels to airline tickets, is expected to increase through 2023 as demand returns more than two years after the Covid pandemic began, according to an industry report released on Wednesday. Private.
According to a report from travel management company CWT and the Global Corporate Travel Association, airfares for business travel are on track to increase by nearly 50% this year compared to 2021, after two years of sharp declines. Next year, fares are expected to rise more than 8%, the organizations said.
Airline and hotel executives have been optimistic about a return to business travel after Covid-19 and measures to limit its spread, such as travel restrictions, have forced companies The company had to suspend many business trips.
While leisure travel has boomed again from the 2020 pandemic low, business travel has lagged behind, taking away a vital source of revenue for hotels and airlines. Business travelers or their employers are generally less price sensitive than tourists and more likely to book a room or air ticket at a higher price.
American Airlines last month said domestic business travel revenue, which accounted for nearly a third of passenger revenue in 2019, was 110% higher than three years ago, before the pandemic.
That’s despite concerns about a slowing economy, labor shortages in the tourism industry and other headaches, as some major corporations look to cuts above spending.
Chris Nassetta, CEO of Hilton Worldwidesaid on a July 27 earnings call. “While people worry about where the macro environment is going, they have to run the business. And in fact, the more they worry, the more they worry. the more they realize they have to get out there and make sure they hustle.”
Industry reports say that globally, hotel prices are likely to surpass 2019 levels next year.
Major events such as industry conferences have also returned, such as Farnborough International Airshow, last month. But prices are rising and the cost per attendee will increase by 25% this year compared to 2019, the report said.