Corporate travel managers expect their organisations’ travel budgets in 2024 to grow by an average of around 8 per cent year-on-year as expectations for virtual meetings decrease, according to a new survey.

US-based bank Morgan Stanley surveyed 135 corporate travel managers from organisations around the world who collectively account for $8 billion in annual global travel spend. 

Their travel budget expectations for 2024 “look promising”, according to Morgan Stanley. Overall, 78 per cent of survey respondents predict their travel budgets will increase in 2024 compared with this year – this was the highest such figure in the survey since 2011, the report noted.

Respondents also expect hotel rates to rise next year, with increases “not dissimilar” to 2023. Globally, travel managers project room rates in 2024 to increase by an average of 5 per cent year-on-year. Rates in the US and UK are expected to increase by 4 to 5 per cent, while rates in Greater China are predicted to drop by 1 per cent.

Meanwhile, corporates have tapered their expectations on their number of virtual meetings in 2024, and some are also opting to trade down to lower priced accommodation to save on costs.

Buyers forecasted that 12 per cent of their organisations’ events that would have been in-person before the pandemic would be virtual in 2024 and 2025. That figure has decreased by 5 percentage points from 2022’s survey.

“This suggests a degree of permanence in the shift to virtual, but the ongoing decline in expectations could provide a tailwind to spend,” the report noted. 

Virtual meetings have a larger presence in Europe where they are expected to rise, added Morgan Stanley. 

More than one-third of respondents said they were now trading down to lower-tier hotels – this percentage has increased by 11 points since the previous survey. Although 62 per cent of respondents said they were not switching accommodation to cut costs. 

Additionally, the use of alternative types of accommodation for corporate travel appears to be “stable”, according to the report.

“While 39 per cent of respondents used alternative accommodation such as Airbnb in the last 12 months – up from 28 per cent last year – 32 per cent expect to use alternative accommodation in the next 12 months, which is stable versus last year, presenting a lessening competitive threat to traditional hotels,” added Morgan Stanley.