After a slow ascent, business travel appears
poised to meet or exceed pre-pandemic levels, despite headwinds
from high prices and sustainability goals
NEW
YORK, July 17, 2024 /PRNewswire/ --
Key takeaways
- Corporate travel spend by U.S. companies is expected to grow
between 8% and 12% to meet or exceed pre-pandemic levels by the
end of 2024.
- Amid rising prices and increasing trip frequency, 73% of travel
managers surveyed expect their companies' travel spend to
climb in 2024, and 58% expect it to increase in 2025, with
those projecting gains expecting an average rise of 14-15% each
year.
- Live events are among the top growth drivers for corporate
travel, as 6 in 10 business travelers surveyed expect to attend
a conference, trade show or exhibition this year.
- Client-related travel remains a top driver of trip
frequency, as 1 in 5 frequent travelers say they travel for
sales or project work more than once a month.
- Companies may look to mitigate costs through compliance tools,
though only 56% of travelers surveyed who are aware of the
company booking platform say they always book trips through these
managed channels.
- Travel managers surveyed report significant progress on the
sustainability front in the past year, as companies shift to
identifying new metrics and increased certifications in the booking
path.
- Return-to-work still influences travel as companies
continue identifying opportunities for in-person interaction.
Why this matters
While leisure travel has taken
off post-pandemic, corporate travel has been slower to recover. As
companies evaluate when and how employees should travel, they are
faced with high prices, sustainability requirements, and the impact
of hybrid and remote work. In its new report, "Upward Climb
with Uphill Struggles: 2024 Deloitte Corporate Travel
Report," Deloitte examines how companies are balancing the
need for more face-to-face interaction with financial and
environmental considerations.
Corporate travel continues to climb
After
several years of historically low volume, corporate travel appears
to be finding its post-pandemic stabilization. By the end of 2024,
Deloitte predicts U.S.-based companies' travel spend
is expected to reach, and perhaps surpass, pre-pandemic levels.
What's more, most of those surveyed traveling for work again say
they enjoy it.
- Business travelers are packing their briefcases more regularly,
as trip frequency per-traveler is up compared to last year. In
2024, 20% of travelers expect to take six to 10 trips (versus 15%
in 2023), and 10% say they will take more than 10 trips (up from 7%
in 2023).
- Company travel spend is on the rise. Most travel managers
surveyed expect their organizations' spend to grow in both 2024
(73%) and 2025 (58%). For those projecting gains, expectations
average out to 14-15% each year. However, travel managers expect
that to slow by a couple of percentage points come 2025.
- Amid the return to conference rooms and airport lounges, 83% of
those surveyed consider business travel to be overall "enjoyable,"
and they see both professional and personal value in it. About half
place networking opportunities (51%) and exploring different cities
(47%) among the top three benefits of business travel.
- Many travelers surveyed also find chances to enjoy the trip
without the business: Two-thirds of corporate travelers say they
extended a business trip for leisure in 2023. One in 7 say they did
so three or more times.
Conferences and clients drive travel demand
Events and
exhibitions are playing a role in corporate travel growth, as well
as client visits, as many seek to reignite in-person
collaboration.
- More than 6 in 10 business travelers (63%) surveyed expect to
attend at least one conference in 2024, while half of travel
managers rank industry events among the top two growth
drivers.
- While more employees are traveling to attend conferences, they
are traveling more often for clients, Deloitte found. Among
frequent travelers, about 1 in 5 surveyed say that they traveled
once per month or more in the first half of 2024 for client project
work (23%) or sales and client relationship building (21%),
compared to just 13% for conferences and exhibitions.
- International travel is also on the rise and stirring demand,
increasingly toward trips beyond North
America. Travel managers surveyed expect international
trips' share of total spend to increase slightly through 2025,
pointing to the easing of entry requirements as the third-biggest
driver of 2024 trip growth, behind live event attendance and budget
increases.
- Return-to-office protocols have a waning impact on business
travel, as 1 in 5 travel managers cite significant return-to-office
by client base and significant return-to-office by respondent's
company as the top two drivers of increased travel.
Key quote
"Business travel has been slower to
come back following pandemic slowdowns, but this could be the year
that it accelerates to new heights. More employees are traveling
for business — and enjoying it — underscoring that in-person
connection often remains a critical component. As companies see a
renewed benefit in the opportunities business travel provides,
business leaders can capitalize on the enthusiasm and prioritize
travel experiences that are valuable to both the organization and
employee."
— Eileen Crowley, vice chair, Deloitte &
Touche LLP, and U.S. transportation, hospitality and services
attest leader
Costs impact corporate travel's bottom line
Amid
higher prices for airfare and paid lodging, travel managers
surveyed say pricing's impact on travel volume is 1.5 times more
significant than budget cuts. Most seek to mitigate costs by
increasing booking compliance through company booking tools, though
getting travelers to use them presents a challenge.
- Nearly one-quarter (22%) of travel managers surveyed say that
high prices are the biggest drag on trip volume for their
companies, and 40% put prices in the top two.
- Higher costs also present issues for travel suppliers, as many
travel managers say suppliers have moved toward tougher negotiating
stances.
- In an effort to mitigate costs, 55% of travel managers surveyed
cite booking compliance as a top cost control measure, ahead of all
other options. Another half of travel managers report that their
companies are encouraging or mandating lower-cost flights.
- However, only 56% of travelers who are aware their company has
a corporate booking tool or agency say they always book trips
through these managed channels.
- While frequent travelers may seem more likely to eschew
compliance tools, responses indicate age is a stronger predicter of
booking compliance than travel frequency: GenX and Boomers are
significantly less likely to say they always use managed
channels.
- Flexibility and loyalty matter for those booking direct. The
biggest driver of booking direct with suppliers is easier
management of trip changes, followed by earning loyalty
points.
- For those surveyed turning to online travel agents, they do so
to find the best deal (56% for airfares and 61% for hotels)
followed by easier shopping (46% for airfares and 35% for hotels)
and change management (39% for airfares and 38% for hotels).
Companies are still mapping the route for sustainable
travel
For many organizations, balancing the increased
demand for more travel with sustainability goals is top-of-mind.
Companies are making progress toward more visibility into their
environmental impact, but most travel managers surveyed still say
emissions targets will hinder travel.
- Most travel managers believe companies need to reduce travel to
meet 2030 sustainability goals. More than half say they need to cut
trips by 10 to 20%.
- Meanwhile, more travel managers surveyed report their companies
have moved toward adoption of travel-related sustainability
measures, encouraging and enabling employees to make greener travel
choices. One-third of travelers confirm their companies are
encouraging them to choose more sustainable providers when
traveling for business.
- Overall, companies are more prepared and active in their
approach to sustainable travel this year: 46% say they have a
strategy in place to assign travel emission budgets to teams and
individuals, up from 30% in 2023.
- Despite efforts from their organizations, travelers surveyed
are slow to adopt sustainable travel booking. Only 1 in 10
corporate travelers say they always factor carbon emissions into
flight selection, while nearly half do it on occasion. Similarly, 1
in 10 say they always consider sustainability ratings when choosing
hotels, while 53% do it on occasion.
- Nearly half of travel managers surveyed say that before
investing in more concrete integration of sustainability in their
travel purchasing path, they want to be more convinced travelers
will take action.
Key quote
"The stabilization of corporate travel holds
both opportunities and challenges as the industry adapts to new
norms and priorities. Travel buyers and suppliers should work
together to navigate these shifting dynamics. As companies manage
pricing pressures, suppliers who lean into flexibility to help
companies meet employee expectations can build loyalty and be
well-positioned for the road ahead."
— Kate Ferrara, vice chair, Deloitte LLP, and U.S.
transportation, hospitality and services non-attest leader
Deloitte's "2024 Corporate Travel Report" is based on two
Deloitte surveys. The first surveyed 104 U.S.-based corporate
travel managers, executives with various titles and travel budget
oversight, between May 16 and 18,
2024. The second survey, fielded between May 28 and June 3, 2024, reached 1,389
U.S.-based corporate travelers, 834 of which said they either
oversee a travel budget or approve travel requests for their
teams.
Connect with us on Twitter at @DeloitteUS or LinkedIn
@EileenCrowley and @KateFerrara.
About Deloitte
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SOURCE Deloitte