Business travel: From recovery to growth

The forecast for the global business travel industry, driven by events such as the annual Arabian Travel Market held in Dubai, points towards an optimistic future that is bigger and more sustainable than ever before

Over the years, the business travel industry has repeatedly shown remarkable resilience. Events with global ramifications such as 9/11, the 2008 recession and more recently the Covid-19 pandemic haven’t dampened the long-term desire for travel and conducting business in-person. As the business travel and meetings industry rebounds towards pre-pandemic levels of activity, the economy, geo-political and environmental forces at both a global and regional level threaten to impact the speed of recovery. For 2023, the outlook is optimistic. However, there is still some uncertainty. Business travel spending is returning, but it looks different and therefore creates a new landscape for business travel. This year will likely see businesses balancing new ways of working with the need to make sustainable choices, whilst considering rising inflation, shortage of labour, increased fuel costs and disruption to the global economy.

According to the latest forecast from Global Business Travel Association’s (GBTA) business travel index – the BTI Outlook –business travel spending reached US$933 billion globally in 2022, 65 per cent of the US$1.4 trillion pre-pandemic business travel spend, with the MEA region accounting for US$23 billion or approximately 2.5 per cent of overall spending within the sector. Global business travel is forecast to make a full recovery by 2026, ending the year at US$1.47 trillion, just above the 2019 pre-pandemic spending.

Travel prices are forecast to continue to rise in 2023 fuelled by continued pent-up demand, increase in fuel prices, staff shortages and inflation, according to the 2023 Global Business Travel Forecast by CWT and GBTA. The forecast projects that airfares on average will continue to rise by an estimated 8.5 per cent in 2023, whilst hotel rates are set to further increase by 8.2 per cent. Car rental prices are projected to see a smaller percentage rise in 2023 as car rental companies continue to suffer capacity constraints due to the lack of new vehicles being supplied as part of the worldwide shortage of microchips.

But despite the challenges, business travel is forecast to reach the US$1.472 trillion mark by 2026 owing to emerging trends in a post-pandemic world. Dynamic changes and workplace transformations are influencing the future of business travel and the evolution of the workplace will continue in 2023. The rise of the remote worker, hybrid workforces and digital nomads have changed the profile of the business traveller. Workplaces will settle into a “new normal” as companies decide how they’ll operate, balancing in-person versus virtual meetings, and flexible work models to best serve employee wellbeing, company culture and the bottom line.

What was once considered a commute to work is now classed as business travel, and travel managers are challenged with bringing dispersed teams together for collaboration and team-building. In-person meetings are critical for culture- and relationship-building, and in-person events have returned with a vengeance as businesses appreciate the value generated from face-to-face meetings and the undeniable energy from reconnecting in-person. After so long with limited networking options, corporates are looking for new opportunities to collaborate, forge partnerships, and strategically advance. Events such as the Arabian Travel Market (ATM) which returns to Dubai from May 1-4, facilitate these discussions. After a hiatus among some attendees due to the pandemic in previous years, they are now highly motivated, driven, engaged, and ready to engage and do business. Now more than ever, human interaction is necessary to propel businesses to the next level, increase visibility, boost return on investment, and gain more value from in-person events, perhaps even in creative new ways.

The pandemic has led to a permanent change in how we balance work and our personal lives. Business travellers are choosing to work from anywhere and blend business with leisure to maximise their work-life balance. As we move into 2023, new strategies focused on the blended traveller will emerge more clearly as the industry recognises the traveller holistically.

Future Market Insights reported the value of the blended travel market in 2022 as US$497.5 billion, with two in five employees requesting blended travel according to travel managers in a recent GBTA poll. Hospitality suppliers are cashing in on this opportunity, creating lifestyle brands, and combining business and long-stay offerings with co-working spaces, amenities and others attractions.

For the future of the travel industry, and the planet itself, we must find the balance between getting back to business travel while creating a greener way forward. The recovery of our industry and adopting more sustainable practices do not have to be mutually exclusive. If we are building back the industry, why not build it back to a better and more sustainable future? It is our responsibility, for the cause of our industry, to make impactful strides in the area of sustainable business travel. Sustainability and climate action will accelerate as a priority, and travel programmes will need to align as organisations race to carbon neutrality. The focus will be on responsible choices, weighing the return on investment of a business trip against its cost, time, and environmental impact. That will require a thoughtful approach to discussing and implementing standards, as every travel programme will need to align with its company’s culture and goals.

Meanwhile, digital innovation has accelerated too as a result of the pandemic as remote workers have to find new ways to communicate and collaborate. Within our industry, business travellers demand that the innovative and intuitive tools in their personal routines are mirrored in their business travel environment too. Technology can make business travel more efficient, faster, convenient, contactless, and customised. And as the digital natives of Generation Z increase in the workplace, so does the role of technology. As business travellers, they are poised to want their travel to be seamless and self-service-driven when selecting business travel options. More than ever, there is a willingness and a desire to innovate and to create a better experience for travellers from stakeholders across the industry.

Mobile device proliferation is part of this trend. There really is an app for nearly everything within our space – and business travel road warriors are among the savviest of digital users. AI advancements are helping in several aspects from pricing to booking and servicing automation too.

As the industry continues to grow, the return of previous talent and bringing new people into our industry need to be a priority. There’s an opportunity to reimagine and recreate a better way forward for the future of our industry and its professionals. The future for business travel looks bright, a world where business travel continues to grow. But, this time it’s about travelling with intention –ensuring a balance between carbon emissions, cost, time and work-life balance.

$933 BILLION

Global business travel spending in 2022

$1.472 TRILLION

Forecast for global business travel spending by 2026

*According to data from GBTA’s BTI Outlook report