Four in 10 European companies and a third of US companies say they need to reduce travel per employee by more than 20% to meet their 2030 sustainability targets. This is according to Deloitte’s third annual ‘Navigating Towards a New Normal’ report, released this week.
On the plus side, travel managers are also reporting that corporate travel’s rebound is on similar trajectories in the United States and Europe, and that spend in the combined markets is projected to surpass half of 2019 levels in the first half of 2023, and two-thirds by the end of the year.
While full recovery to 2019 spend volume appears likely by late 2024 or early 2025, this prediction is tempered with the reality of adjusting for lost growth and inflation, which indicates that in real terms, corporate travel will likely be smaller than it was prior to the pandemic.
As challenges for visiting different parts of the globe decline, international trips are growing. With this trend, US respondents expect international’s share of travel costs to jump from 21% in 2022 to 33% in 2023. European respondents expect 32% of 2023 spend to go on international trips within the continent, and 28% beyond.
Live-event attendance is the biggest driver for increased spend, jumping to the top spot from fifth place in 2022. More than half of travel managers in both the United States and Europe expect industry events to spur travel growth this year.
As clients return to the negotiating table after two years, but with a lower expected trip volume, they “are encountering higher airfares and room rates,” the report says. “These pricing conditions fit awkwardly both with travel buyers’ seemingly cautious financial approach and with many travel suppliers’ widely reported staffing challenges and slow infrastructure updates.”
Reportedly, hospitality providers are taking a stronger approach than airlines, and European suppliers are pushing harder than American ones.
To keep up with a shifting and unpredictable landscape, corporate travel managers will need to be open to the reshaping of travel to account for social shifts such as more flexible work, and higher expectations of flexible travel bookings.
Travel will take a strategic position within companies, with changing attitudes toward conferencing platforms and other technology as replacements being a potential development.
The report surveyed 334 travel managers from February 7 to 23, 2023. The survey reached 106 US-based respondents, and 228 European respondents based in the United Kingdom (56), Germany (57), Spain (59), and France (56).