A new report from research firm Morning Consult predicts business travel will never return to normal levels.
This comes after tighter company budgets and new ways of virtual work permanently changed business travel policy, according to the report, titled “Business, But Not As Usual.”
The report said demographics are also changing – business travelers are now younger and more likely to travel economy class, with half earning less than $50,000 annually.
“The old stereotypes of high-spending travelers tipping for first-class tickets no longer hold true,” the report states.
Companies reduce travel
While leisure travel continues to grow worldwide, business travel in the United States stagnated last year, according to Morning Consult.
The survey, which it conducted on about 4,400 Americans, showed that business trips – locally and internationally – increased by only 1% in 2022, according to what was reported by “CNBC”, and viewed by “Al Arabiya.net”.
Nearly a third of the respondents said their companies had changed their business travel policies, most commonly by reducing the frequency of business trips (60%) or by sending fewer employees on business trips (56%). More than half (54%) said that companies closely scrutinize travel expenses as well.
Survey respondents believe these changes were made to reduce costs, improve employee health and wellness, and because virtual meetings eliminated the need for certain face-to-face meetings.
The top business leaders in the survey also cited sustainability, which the report notes is “a factor that is not linked to temporary events or conditions.”
pressure to achieve sustainability goals
And according to a corporate travel study published this month by Deloitte, one in seven companies surveyed in the US – and one in five in Europe – expect sustainability efforts to reduce corporate travel in 2023.
The report is based on a survey of 334 travel managers and executives with oversight of the travel budget. The study indicates that one in three US companies – and about 40% of European companies – have indicated the need to reduce employee travel spending by more than 20% to achieve the 2030 climate goals.
Another report by Morning Consult, published last year, noted that business trips are dropping more in some countries than others.
Morning Consult asked business travelers, who traveled for work at least 3 times a year before the pandemic, when to expect their next business trip:
“At least half of French, British and German business travelers who were on business trips before the pandemic say they will never come back again,” said Lindsey Rochke, travel and hospitality analyst at Morning Consult. “However, other regions are showing more promise, namely India, China and Brazil.”
As for how workers feel about their current travel schedules, most feel good about it, at least in the US, according to a February Morning Consult report.
Flights are stagnant but spending is on the rise
While trips may not increase by much, corporate spending on business travel is rising rapidly, according to a Deloitte report. Business spending on travel in the US and Europe nearly doubled last year – and is on track to reach pre-pandemic levels by late 2024 or early 2025.
While this may look like a full recovery of sorts, the report indicates that companies are being forced to spend more due to inflation and higher travel costs.
“High airline and room prices are the biggest contributor to the increase in costs, and they have also become the number one factor hindering the number of flights taken,” she said.
According to the report, flexible bookings and employees’ desire for luxury business trips are also behind the high costs.
Companies said they save money by choosing cheaper accommodation (59% of companies do this), booking cheaper flights (56%) and reducing frequency of travel (45%), according to Deloitte.
Bright spots for business travel
But there are several bright spots for those cheering the strong return of business travel, according to reports. Spending on international business travel is expected to pick up in 2023, according to Deloitte — in Europe.
According to its report, “leisure” travel – which mixes business and leisure trips – is also on the rise, driven by flexible work arrangements that began during the pandemic.
The report notes that employees often pay more for mixed trips, although many feel the investment is “worth it” because they can travel more often and for longer periods of time.