Turismo
Global business travel and events costs expected to remain elevated through 2024, reflecting 'true new cost of travel'
said Patrick Andersen , CWT's Chief Executive Officer.
aid Suzanne Neufang , Chief Executive Officer, GBTA
The global average ticket price (ATP) of flights booked for business travel rose dramatically in 2022, experiencing record price increases. The ATP rose by 72.2% YoY to $749 in 2022, far surpassing 2019 levels ($670) . While demand has recovered strongly with passenger numbers quickly approaching pre-pandemic levels, driven primarily by pent-up leisure travel demand, airline capacity continues to be constrained by labor shortages and supply chain issues. Looking forward, ATP growth is likely to be more modest at 2.3% in 2023 and 1.8% in 2024, albeit from an already high base. Still, many corporate buyers now have less leverage to negotiate with airlines, as their travel volumes remain below pre-pandemic levels.
At $855 , the Europe , Middle East , and Africa (EMEA) region recorded the highest ATP in 2022, compared to other parts of the world. This represents a 31.5% increase from 2021. More modest price increases are expected going forward, with ATPs predicted to rise 2.9% this year and 2.2% in 2024.
However, in terms of year-over-year growth, the ATP in Asia Pacific climbed 148.7% YoY in 2022 to $567 – the biggest increase seen in any region, despite a lack of international travel demand from China . Key business travel destinations, including Australia and Japan , fully reopened to vaccinated travelers and resumed visa exemption arrangements. Average airfares rose 75.3% for Australia and 79.3% for Japan in 2022, with a sharp rise in the share of long-haul tickets. As airlines in the region – particularly the major carriers from China – continue to add more international route capacity, the increased supply should help ease price pressures in the region, with ATPs forecast to rise 4.8% in 2023 and 2.7% in 2024.
Like air travel ATPs, the global average daily rate (ADR) for hotel bookings exceeded earlier predictions, rising 29.8% YoY to $161 in 2022. Occupancy rates have been high, but so have labor, energy, and food and beverage costs. In fact, several cities across the globe including London , Miami , and Singapore , reported their highest ADRs on record in 2022. Meanwhile, hotel construction remains down from its pre-pandemic peak, creating supply constraints. With fewer properties to compete against, existing hotels can sustain their pricing power for longer, even though ADR gains are slowing. ADRs are projected to climb a further 4.3% in 2023 to $168 , followed by a 3.6% increase to $174 in 2024.
North America saw the highest growth in hotel ADRs of any region in 2022, rising 33.8% YoY to $174 . Occupancy in the region is expected to grow at a slower pace in the second half of 2023 and 2024 due to economic concerns, with ADRs forecast to rise 4% to $181 in 2023 and 3.3% to $187 in 2024.
ADRs in Latin America also rose sharply by 26.9% YoY in 2022, as several countries in the region experienced double digit inflation. Now, with inflation appearing to have peaked, and ADRs are expected to grow by 9.1% in 2023 and 5.6% in 2024.
Car rental supply has been constricted as companies sold vehicles during the pandemic when demand collapsed. As business returned, vehicles were not replaced at pace due to supply chain issues, largely due to a worldwide shortage of vehicle semiconductors which led to inflated vehicle prices. These factors have contributed to prices rising by 9.8% YoY in 2022, with a further 6.7% increase forecast this year. Pricing growth is expected to cool to 2.1% in 2024.
In-person meetings and events have rebounded more robustly than many had expected. Client acquisition and relationship building are key business goals that are not easily executed virtually. There has also been exceptionally strong demand for incentive trips, as companies seek to motivate and reward employees. In fact, CWT Meetings & Events has observed these trips becoming longer and more frequent and expects the trend to continue.
The average daily cost per attendee was $160 in 2022. This is expected to increase to $169 in 2023 and then $174 in 2024.
Lead times for events remain short in this post-pandemic world. However, organizers should now look at 2024 with a 12-month planning cycle if they want to keep prices at a reasonable level. At the same time, consolidating transient travel and M&E spend can give buyers more leverage when it comes to negotiating pricing.
The figures in this report are based on data from more than 70 million ticketed flights, over 125 million hotel room night bookings and more than 30 million car hires covering data from 2018 to the present. The projections are based on econometric and statistical models, specifically ARIMA models, developed by the Avrio Institute. Insight is provided by CWT personnel and market research.
Learn more about the 2024 Global Business Travel Forecast and trends that lie ahead in 2023 and 2024 during an education session at
The Global Business Travel Association ( GBTA ) is the world's premier business travel and meetings trade organization headquartered in the Washington, D.C. area serving stakeholders across six continents. GBTA and its 7,600+ members represent and advocate for the $1.158 trillion global business travel and meetings industry. GBTA and the GBTA Foundation deliver world-class education, events, research, advocacy, and media to a growing global network of more than 28,000 travel professionals and 125,000 active contacts. Visit www.gbta.org, www.gbtafoundation.org and follow us on Facebook, LinkedIn, Twitter, and YouTube.
CWT is a global business travel and meetings specialist, with whom companies and governments partner to keep their people connected, in traditional business locations and some of the most remote and inaccessible parts of the globe. A private company – owned through funds managed by a group of leading global financial institutions including Barings, MacKay Shields , and Monarch Alternative Capital – CWT provides its customers' employees with innovative technology and an efficient, safe and sustainable travel experience. Follow us on Facebook, LinkedIn, and Twitter.
Avrio Institute helps CxOs and global executive teams understand how technological and economic shifts will impact their respective industries, companies, and business models. Avrio Institute works with a diverse group of companies - from scrappy start-ups to Fortune 100 giants - across technology, financial, entertainment, healthcare, industrial, media and advertising industries. Led by Dr. Shawn DuBravac , Avrio Institute helps clients discern technological, economic, and industry trends and transformations as they unfold.
CONTACT:
CWT Public Relations,
corepr@mycwt.com
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