The State of Business Travel

Just a few years ago, corporate travel felt like a relic of a bygone era. Everything ground to a halt in 2020—airports were empty, hotel lobbies deserted, corporate buffets left untouched, and the familiar hustle of business travelers was replaced by the hum of virtual meetings.

Companies tightened their belts, scrutinizing every travel expense, and environmental concerns further grounded frequent flyers. Sure, there were more than a few factors at play, but try as we might to forget it, much of the business travel malaise can be laid at the feet of the global pandemic.

That worldwide event reshaped the landscape, introducing us all to the new normal of remote work and digital collaboration. But for much of the business travel industry, the turbulence has subsided. In this blog, we’ll examine the dynamic upturn in business travel and look ahead to the future of globetrotting for work.

The Rebound: Business Travel Takes Off

It's 2024, and business travel has dramatically changed. According to a report by the Global Business Travel Association (GBTA), global business travel spending is set to surpass $1.5 trillion in 2024, outpacing the pre-pandemic benchmark. The resurgence is fueled by economic stabilization, pent-up demand, and the return to traditional travel habits. This rebound is particularly evident in the United States, where business travel spending reached an impressive $421.1 billion in 2022, the year with the most useful and comprehensive set of data.

This substantial expenditure highlights the sector’s significant role in the economy, contributing $484 billion to the U.S. GDP—about 1.9 percent of the total GDP. For every dollar spent on business travel, the net-new GDP return is $1.15. Moreover, business travel supports 6 million jobs across various sectors and generates $119 billion in tax revenue, underlining its critical economic impact.

The Present: Growth and Trends

When we think about when exactly the industry began to awaken from its doldrums, the year 2023 marked a significant upturn in corporate travel. The GBTA reports a remarkable 25 percent increase in business travel spending compared to the previous year. This surge was driven by a mix of economic recovery, the easing of travel restrictions, and a revival of in-person meetings and conferences.

A closer look at regional spending reveals that Asia Pacific is leading the charge, commanding 41 percent of the global business travel market in 2024. North America follows with 26.7 percent, and Europe holds 26.4 percent. The shift towards digital payment methods is notable, with over half of business travelers adopting digital wallets for corporate expenses. In Asia Pacific, this trend is particularly pronounced, with 69 percent of travelers using digital wallets. This adoption is revolutionizing the travel experience, enhancing convenience, and streamlining expense management.

The Future: Navigating Challenges and Opportunities

Looking ahead, the business travel landscape presents a mix of promising growth and emerging challenges. The forecast for 2028 is optimistic, with global business travel spending projected to exceed $2.0 trillion. However, this growth is accompanied by significant hurdles. Deloitte’s 2024 Corporate Travel Study highlights that while corporate travel spending is anticipated to grow by 8-12 percent in 2024, the industry must balance high travel costs and evolving sustainability demands.

Cost management remains a pivotal concern, with high travel expenses prompting companies to reconsider their travel strategies. Nearly half of surveyed companies are implementing travel emission budgets and investing in sustainable practices such as eco-friendly aviation fuels and certified green hotels. Balancing cost, comfort, and environmental responsibility is reshaping travel policies and practices, pushing companies toward more sustainable operations.

The Rise of "Bleisure": Merging Business and Leisure

In terms of trends, we expect to carry on through the upcoming years, "bleisure"—a blend of business and leisure—will continue to augment the way professionals approach work trips. This growing trend of extending business travel for personal enjoyment is transforming business travel norms. Here’s why this trend is gaining traction:

• Work-Life Balance: Professionals are increasingly seeking to balance work with personal time.
• Greater Flexibility: Advances in remote work and digital tools mean travelers can work from almost anywhere.
• Enhanced Travel: Business trips allow the chance to experience destinations beyond the conference room.
• Cost Efficiency: Extending a business trip can be more cost-effective than separate trips for work and leisure.
• Family Time: Many professionals are leveraging business trips as an opportunity to bring family along.
• Networking Opportunities: Additional time spent in a destination can also open doors for informal meetings or social events with clients or colleagues.
• Cultural Enrichment: Exploring local attractions and immersing in different cultures is a significant draw for many business travelers.

The New Way: Booking Behavior and Compliance

In today’s travel environment, the behavior of business travelers continues to shift, with a significant number of travelers now prefer booking outside corporate channels to secure better deals and greater flexibility. This trend is particularly prominent with the rise of user-friendly leisure travel platforms, which facilitate "rogue" bookings through online travel agencies and direct airline or hotel bookings.

This shift presents a challenge for travel managers who must enforce compliance while addressing traveler preferences. To adapt, corporate travel programs need to strike a balance between convenience and adherence to company policies, allowing travelers to access competitive rates while remaining within compliance guidelines.

The Road Ahead: Business Travel of the Future

As business travel continues to take off, it is poised for a future characterized by both resilience and innovation. The pursuit of in-person connections remains strong, driven by the value of face-to-face interactions and the ongoing quest for growth and development.

Exploring this new era requires a focus on leveraging the inherent value of business travel while addressing challenges related to cost and environmental impact. The future promises to be dynamic, and full of opportunities for those ready to adapt, innovate, and lead in this vibrant sector.