NEW YORK — Business travel has begun to take off, but a full recovery experiences further delays, according to the third edition of Deloitte’s corporate travel study, Navigating Toward a New Normal, which examines why and when employees are expected to travel for business, as well as the dynamics creating headwinds and opportunity for the sector. The study is based on a survey of 334 U.S.-based and European executives with travel budget oversight, fielded between Feb. 7 and Feb. 23, 2023.
A variety of factors impact the decision to travel for business, including employee safety, client interest in meeting in person, the value of attending a conference and whether virtual conferencing platforms can replace a trip. Other key takeaways include:
- Corporate travel spend in the U.S. and Europe is projected to surpass half of 2019 levels in the first half of 2023 and rise to two-thirds by the end of the year. Full recovery following the pandemic appears likely by late 2024 or early 2025.
- Live events are set to comprise a significant share of corporate travel, advancing from the fifth biggest driver of increased spend in 2022 to the top spot in 2023. More than half of travel managers in both the U.S. and Europe expect industry events to spur travel growth this year.
- International trips will account for a larger portion of the recovery this year. The international share of travel costs for U.S. companies is expected to rise from 21 per cent in 2022 to 33 per cent in 2023.
- Amid increased workplace flexibility and use of technology, travel for clients outweighs travel for team building and internal meetings.
- Travel buyers are re-negotiating contracts with suppliers and balancing lower expected trip volumes with higher rates for hotel rooms and airfare.
- One-third of U.S. companies and four in 10 European companies say they need to reduce travel per employee by more than 20 per cent to meet their 2030 sustainability targets.
“As business travel continues its climb, higher airfare and hotel costs are likely slowing the increase in trips taken,” says Eileen Crowley, vice chair, Deloitte & Touche LLP and U.S. Transportation, Hospitality and Services attest leader. “As business leaders take a strategic view of their travel plans and the industry adapts to a new normal, live conferences and events in particular are proving they can offer effective opportunities to connect in person, especially as remote and hybrid work remain fixtures of the corporate world.”
“The return of corporate travel continues to take a winding road as both business leaders and travel suppliers consider not just rising costs, but the necessity of certain in-person meetings amid the increasing use of technology to offset financial and environmental goals,” says Mike Daher, vice chair, Deloitte LLP and U.S. Transportation, Hospitality and Services non-attest leader. “Suppliers who take a long-term view of their relationships with travel buyers and communicate with them about their sustainability progress should be better poised to navigate ongoing shifts in travel priorities.”