A recent BCD Travel survey found that 60% of travel buyers said their company reduced its travel budget in the past few years, and 96% introduced cost control policies. But none of that has stopped the rebound in business travel.

Even with corporations pushing video calls over in-person meetings and as they cut non-essential trips, 2024 is set to be a strong year for the industry.

“The areas we saw growth in were what we segmented as road warriors, like salespeople, account managers, where there’s a clear ROI on the travel,” Henry Gilroy, senior vice president of strategic development for Internova Travel Group, a travel agency network. “Where we saw more pressure on travel was on those employees where they travel a couple of times a year, and they might be more discretionary events, like company events, conferences, where maybe they went because it was a good chance to catch up with people, but there’s no clear ROI.”

The year is going better than was initially forecasted. 

An expected recovery in 2023 didn’t materialize following a battery of layoffs at tech companies, which also froze some travel spending, according to Tim Wagner, senior vice president of consulting services at HRS, a travel management company.

A lot of those freezes have been lifted as balance sheets and stock prices improve, particularly in the U.S. 

But there are some global regions that are weaker than others amid continued economic uncertainty. While Nordic markets are particularly strong, Central European countries are lagging, and as a result putting a halt to business travel. 

“That doesn’t mean that it’s fully banned, but it’s basically them limiting it to sales meetings or super important meetings, but all the internal meetings then could be reduced,” Wagner said.  

Growth in Global Business Trips

The business travel market totaled $245 billion in 2023, according to GlobalData, a British data analytics firm, with the market expected to reach its pre-pandemic level this year and continue its growth trajectory at a compound annual rate of more than 11% from 2023 to 2027.

GlobalData forecasts that the number of outbound business trips this year will reach 220 million compared to 174 million in 2023 and 207 million in 2019. The top destination markets for business travel are the United States, France, Italy, China and Austria, among others.

The Chinese market is operating at about 20% of its pre-pandemic capacity, mostly due to a weak local economy.  

As of last year, the Global Business Travel Association found in a survey that 67% of travel buyers expect their travel budgets to increase (39%) or remain about the same (28%), with only 14% of buyers reporting that they were implementing a plan to limit business travel because of economic concerns. That survey polled over 860 global travel buyers, suppliers and other industry stakeholders last year from 46 countries.

That said, “cost management stands out as a top strategic priority, with 62% of respondents emphasizing its importance for their company’s business travel program,” GBTA found. 

Trading Down to Save Costs

The BCD survey, which polled 211 travel buyers in April, found that the most popular way that companies are reducing costs was to reduce travel volume. The company declined to provide further comment. 

The average daily rates at hotels continue to grow at strong rates, prompting some companies to require a downgrade in lodgings, Gilroy said. 

“Even just for the same amount of travel, the cost is going up so,” Gilroy said. “Companies potentially will trade down. You know, if they were staying at a four star to hit their travel budget, now, they maybe have to trade down to a three star hit their budget.”

That said, higher-level executives continue to stay at the nicer locations, swallowing the increasing rates.