More Trips, Higher Prices: Business Travel Spending May Finally Top 2019 Levels

17.07.2024 - 07:45 / skift.com

Business travel spending by U.S. companies may finally exceed pre-pandemic levels by the end of the year, according to a Deloitte report released Wednesday. 

Spending is expected to grow between 8% and 12% to meet or exceed pre-pandemic levels by the end of 2024, the consulting company found in two surveys of U.S.-based corporate travel managers and executives, as well as U.S.-based corporate travelers.

“Business travel has been slower to come back following pandemic slowdowns, but this could be the year that it accelerates to new heights,” said Eileen Crowley, vice chair at Deloitte & Touche and U.S. transportation, hospitality and services. “Our managers that we’ve spoken to still expect their budgets or their spend to increase in 2025,” she said, citing two factors: Higher prices from both airlines and hotels and an increase in trips.  

That said, next year’s growth will be slower as stability returns, she said.

Earlier this year, the Global Business Travel Association forecasted that most travel buyers expected their company’s business travel spending and volume to increase in 2024 compared to 2023. That survey found that 59% of buyers expected the number of business trips would increase at their company this year, with just 11% saying employees will take fewer business trips.

More travel buyers in North America, 66%, expect an increase in employee travel in 2024 compared to European buyers at 37%.

Travel as a whole has surged in 2024, with a daily record number of passengers going through TSA checkpoints on July 7. Global business travel spending is projected to total $1.5 trillion this year, according to the GBTA, up from $1.43 trillion in 2019. Last year, business travel totaled an estimated $1.36 trillion.

A U.S. growth rate of 8% to 12% in business travel spending would put it ahead of The Conference Board’s projected 2.1% GDP gain for the year, indicating a still-recovering industry, Deloitte said. The frequency per-traveler is also rising, though growth may slow in 2025.  

More travel paired with inflated prices has 73% of travel managers expecting higher spending this year, and 58% expecting increases in 2025. While companies aren’t cutting back amid higher prices, they are seeking to rein in costs where possible, mainly by having employees book through company platforms rather than directly with suppliers. 

But only 56% of travelers surveyed who are aware of the company booking platform said they always book through those managed channels. 

The higher prices are very real: The American Hotel and Lodging Association projects a 2024 average daily rate increase of 3% vs. 2023 – and 22% vs. 2019. Average U.S. domestic airfare in 2023 was up 8.5% vs. 2019.

Deloitte said airlines and hotels