Business travel is recovering faster in some markets than others

Recent signs suggest that business travelers are returning to the road in large numbers, although a full recovery is slow.

“We are now experiencing a significant improvement from February 2023,” said Tas Messinis, a strategic consultant at Australia-based travel platform Locomotive.

Messinis said that as economies recover, businesses will feel more confident investing in travel expenses for meetings, conferences and events.

“As companies reassess their business needs post-pandemic, we’re seeing a resurgence of ‘DIY’ corporate travel departments in the US and Australia,” Messinis said. “Driven by new technology players, corporations [can now] Negotiate better rates directly with airlines, hotels and other travel providers, resulting in significant cost savings, increased efficiency, compliance and traveler safety.

Globally, travel spending is slowly returning to pre-pandemic levels, but markets such as India are already experiencing significant recovery.

Gaurav Sundaram, president of India-based Proconsul Consulting, said India’s total flight data in 2023 will exceed 2019 numbers.

“There is a very strong recovery in travel due to the high economic activity across the country,” Sundaram said. “[There is a] A desire to connect with customers.”

Although much of the travel in India may be domestic, international travel is definitely on the rise for the long term – despite the hurdles posed by visa laws.

“The government actively supports business activities,” Sundaram said. India is projected to become the third largest economy in the world in the next five to six years.

In the United Kingdom last year, many companies increased their business travel, although the recovery still has room to run, said Scott Davies, chief executive of the Institute of Travel Management (ITM).

Citing a recent ITM survey of 100 corporate travel buyers, managers and travel executives across global, EMEA, UK and Ireland responsibilities, Davies said nearly 60 percent of corporate travel buyers described the current economic environment and cost of travel. In the year By 2023, travel volume is the biggest hurdle. Supply chain disruption and service standards (17 percent of respondents) and sustainability or net zero targets (11 percent of buyers) were additional reasons for decline.

“Business travel is an important enabler of business, and that will ultimately drive it,” Davis said. “The rate has gradually increased over the past year, but only 28 percent of respondents to a recent ITM survey said they expect travel to return to pre-pandemic levels.”

Mixed forecasts

In the year A January 2023 poll from the Global Business Travel Association found that the distribution of travel spending among businesses was 28 percent for meetings with current clients, 20 percent for internal company meetings, 14 percent for service trips and 18 percent for conferences or industry events.

Association spokeswoman Nicky Stimson noted regional differences in post-pandemic business travel rates due to a variety of economic, political and geographic factors. However, the main obstacles to an overall accelerated recovery include “persistent inflation, high energy costs, severe supply chain challenges and labor shortages, significant economic slowdowns and lockdowns in China, and major regional impacts from Ukraine and the war.” Emerging sustainability considerations.

According to the association, global spending isn’t projected to fully recover to $1.4 trillion until mid-2026 — at which point it’s expected to reach $1.47 trillion.

International business travel costs in the US as of 2019. Source: International Business Travel Association

In the year These forecasts estimate an additional 18 months for the travel industry’s global recovery, beyond what was originally predicted in the November 2021 Global Business Travel Association Business Travel Index.

Business travel status acquisition

Driven primarily by domestic travel rates, North America is set to recover in travel spending in 2021, according to the Global Business Travel Association. Both North America and Western Europe are expected to recover significantly, with a compound annual growth rate of 23.4 percent (to $363.7 billion) and 16.9 percent (to $323.9 billion) by 2026.

Meanwhile, the Asia Pacific region – and China in particular – has helped bolster spending in the travel industry for a recovery in 2021. The following year saw a reversal due to China’s zero-covid policy and lockdowns. However, the region collectively recovered to 66 percent of pre-Covid levels by the end of the year.

Latin America, in turn, saw only a small increase in travel spending in 2021 due to slower vaccination rates. Business travel is expected to return to 83 percent of pre-Covid-19 levels, which will see 55 percent growth in travel spending for Latin America next year.

In the wake of the pandemic, many businesses have made adjustments to their travel policies – changes that now continue to evolve with a central focus on cost savings, sustainability and employee safety.

For example, trends such as sustainable and responsible business travel, using alternative accommodation options and incorporating leisure activities into business trips have developed as key aspects of post-pandemic travel initiatives.

While virtual meetings have been effective during the pandemic, face-to-face meetings are still needed, especially to build relationships and close deals, Messinis said. “As businesses seek to expand their markets, they must travel to explore new opportunities, meet with customers or partners, and establish a physical presence in new locations.”

Photo credit: Image of post-pandemic business trips. By Bram Naaus. Source: Unsplash.