Skift Take
Corporate travel remains below 2019 levels, but airlines and hotels see a steady recovery.
During the pandemic recovery, business travel has been slower to pick up compared to leisure travel, as many corporate professionals found satisfaction in video calls and fewer trips to the office.
Recent indicators suggest that U.S. business travelers are gradually returning, with even West Coast technology companies, traditionally slower in business travel, showing signs of a comeback.
According to the U.S. Travel Association’s forecast from January, business travel is expected to reach 95% of its 2019 level by 2024, up from 89% in the previous year. This growth projection may increase further if the U.S. economy experiences a “soft landing” scenario, leading tech and financial services companies to increase their business travel activities.
Fortune 500 Green Shoots
At an investor conference, executives from Alaska and Delta Air Lines highlighted a growing demand for travel from Fortune 500 companies. While leisure traffic has been a major focus for the airline industry, the return of business travelers, including global corporate travelers, is now seen as an additional source of revenue.
Both airlines reported an uptick in travel volume from major tech companies like Amazon and Microsoft, indicating a positive trend in business travel returning to pre-pandemic levels.
At present, Delta is optimistic about increased demand, particularly from the corporate sector, while Alaska is seeing more business traffic at its West Coast hubs.
AmEx GBT Is Bullish
American Express Global Business Travel has observed a growing interest in travel among large global multinationals, especially in the tech and professional services sectors. The company anticipates a narrowing gap between SMEs and global corporations in terms of travel activity through 2024.
AmEx GBT is forecasting a sales increase of up to 9% this year and expects moderation in airfare and hotel rates in 2024.
Not Everything’s Rosy
Despite the positive signs, some challenges still exist for the travel industry. Video conferencing technology continues to compete with in-person meetings, and prices for flights, hotels, and rental cars remain high.
Many companies are embracing a work-from-home culture, which may reduce the need for extensive business travel. Additionally, corporate sustainability goals are influencing travel decisions, with many companies looking to reduce travel per employee to meet environmental targets.
However, with a strong U.S. economy and low unemployment rates, major corporations are gradually increasing their business travel activities, showing optimism for a return to normalized demand levels in the near future.
Industry leaders from Hilton and Marriott International have also expressed confidence in the gradual return of business travelers, citing positive growth trends despite existing challenges.
