Corporate travel is steadily returning to its pre-pandemic levels as openness to international travel, conference attendance, client sales and project work all continue to grow.
According to Deloitte's 2024 Corporate Travel Study: Upward Climb with Uphill Struggles, while leisure travel rebounded quickly, corporate travel has had a slower recovery due to financial costs, environmental impact, concerns about health and safety, and a liking for the pandemic-led virtual and home-centred work environment.
Findings from Deloitte’s surveys of US travel managers, travellers and budget owners indicate that corporate travel spending may surpass 70% of 2019 levels by the end of 2024. This corporate travel spending growth is being led by high-incidence conference trips, with 63% of respondents expecting at least one international conference in 2024, and high-frequency client trips driven by demand for participation in events and clients' increased demand for in-person meetings.
Expenses grow
However, financial constraints and increased expenses pose the greatest challenge to corporate travel recovery, particularly, high airfares and hotel rates. The report's travel manager respondents reported that their companies were encouraging or mandating lower-cost flights, and many were putting amenity adjustments on the negotiating table – sometimes demanding more to justify strong rates and sometimes sacrificing to save.
Compliance
Travel managers believe that more stringent compliance with corporate travel policies in travel bookings may help control costs. The report found that age was a much stronger predictor of booking compliance than travel frequency. Gen Xers and Boomers make the most bookings outside managed corporate channels, with only 38% of Gen X and 36% of Boomer respondents saying they consistently use their corporate travel booking channels. Of the Boomers who do not use the managed channels, 70% prefer making direct airline bookings, and 76% prefer making direct hotel bookings for their corporate travel.
Of the 33% of Gen Zs who admitted they only used their corporate travel booking channels sometimes, 65% use OTAs for airline bookings and 52% use OTAs for hotel bookings.
According to the survey, OTAs are favoured for their user-friendliness, while direct booking channels are favoured for their loyalty points capabilities.
Sustainability
Corporate travel buyers are striving to improve their sustainable travel policies by flagging and occasionally mandating specific sustainable practices on their corporate booking platforms. These practices include:
- booking of flights that use sustainable aviation fuel and track emissions,
- booking accommodation with sustainability certifications, near business events to reduce transport emissions, and
- renting electric vehicles.
However, corporations have shown scepticism towards certain sustainable practices. The report found that corporations were feeling the need for more reliable data, evidence of impact and confidence in travellers' uptake to further integrate these sustainable measures into their travel policies and managed booking tools.
"Corporate travel is still lagging behind pre-pandemic figures, but it is well along the road to recovery," says Deloitte.
"Conferences, sales visits, and client project work are all spurring gains, as companies and employees alike see the value of increasing in-person connections. This more stable annual growth rate is likely to present some challenges and opportunities as leaders adapt to new norms and priorities."
Read more about the state of the South African and global corporate travel sectors in the Travel News Corporate Travel Feature tomorrow, Wednesday September 18.
