Ask Skift: Will Business Travel Spending Rebound?

Although business travel has made significant progress in its recovery in recent months, it’s uncertain if and when it will fully rebound from the pandemic.

What are the issues affecting business travel? We posed the question to Ask Skift, our artificial intelligence chatbot. Ask Skift provided answers using information from our news coverage and research. We also conducted additional reporting.

Ask Skift said:

The recovery of business travel spending appears to be varied depending on region and industry. As of August 2023, business travel volumes were reported to be at least 30% below 2019 levels globally, with recovery said to have either fallen off or flatlined in that year, particularly among Europe’s largest airline groups and U.S. airlines.

However, a more optimistic outlook is seen in India, where a majority of businesses (67%) anticipate an increase in business travel this year, with 77% of businesses planning to raise their travel budget. This suggests that India is recovering faster than other markets when it comes to business travel.

It’s important to note that the full stabilization of factors impacting business travel, such as travel constraints, capacity issues, labor shortages, supply chain issues, and travel disruptions, is not expected until 2024.

On the other hand, in regions like the U.S., UK, and Australia, the outlook appears less optimistic. For example, more than half of the respondents across these countries stated that they expect their company’s business travel spending to increase in 2023 from 2019 levels, but our assessment of the survey data revealed a pessimistic outlook for the overall recovery.

Most business travelers in the U.S. and India expect spending to reach 2019 levels in the next 1 to 3 years. In contrast, a majority of business travelers in the UK and Australia stated that it’s highly unlikely that business travel spending will reach 2019 levels ever again. 

As such, while there is anticipation for a rebound in business travel spending, the extent and pace of this recovery may vary significantly across different regions and industries.

What else you need to know:

The Global Business Travel Association projected last month in its Business Travel Index Outlook report that spending will hit $1.52 trillion in 2024, surpassing the record figure of $1.43 trillion set in 2019.

The group also anticipates that global business travel spending will reach $1.8 trillion by 2027. It had previously projected that spending wouldn’t hit the $1.4 trillion range until the midway point of 2026.

In addition, a report from travel technology firm Rategain this spring projected that business travel spending in the Middle East and Asia during the April-June quarter would exceed pre-Covid levels.

Business travel’s faster-than-expected spending rebound comes despite many airlines reporting a 60-80% return of corporate travelers from pre-pandemic levels. Although Brazilian carrier Azul recently announced both corporate travel revenues and volumes had fully recovered in August, its counterparts across Europe and North America have largely reported a plateauing of the sector’s recovery. United Airlines CEO Scott Kirby said this June that the U.S. was experiencing a business recession.

Photo Credit: Businessman reading a magazine while traveling on airplane on business trip