Anticipated 2024 Uptick in Business Travel Costs, with Subsequent Moderate Escalation

According to the CWT/GBTA Global Business Travel Forecast 2024, air fares, hotel prices and car rental rates are expected to rise throughout 2023 and 2024.

However the pace of the increases will be "more moderate".

CWT's annual report, released today by CWT, notes that travel prices "skyrocketed", "far exceeding" predictions made a few months ago. TMC attributed this to rising fuel prices, staff shortages, and supply chain issues, along with "red-hot demand" in both the leisure market and corporate market.

Patrick Andersen (CEO of CWT) said: "Looking forward, prices seem to be levelling off with much milder increases projected over the next 12 to 18 months. We could now be looking at the true new cost of travel."

It is expected that the global average flight ticket price, which grew by 72 percent in 2022, will only rise by 2.3% this year, to $766, and by 1.8% in 2024, to $780.

In 2022, air fares in EMEA (Europe Middle East Africa) were $855. It is predicted that they will see a further 2.9 percent increase this year, followed by a smaller 2.2 percent rise in 2024.

Inflation and GDP growth this year are expected to moderate the price increase of air fares, resulting in a stabilization.

The average daily rate for hotels is expected to increase by 4.3% this year, to $168. In 2024, it will rise by 3.6% to $174.

ADRs in EMEA rose by 28.1% to $164 per ADR in 2022, a rise of $28.1% over the previous year. In 2023 and 2024, EMEA is expected to see an increase of 3%. The ADR will then be $169 or $174.

Richard Johnson from CWT Solutions Group added: "The percentage increases were phenomenal last year, but the good news is that for the next 18-months, we shouldn't be expecting anything similar to that type of spike. Prices will rise, but not as much as in 2022.

Prices for other categories of business travel will continue to rise. Car rental rates are set to increase by 6.7% to $48 per night this year, and then "cool down" to a mere 2.1% ($49 per night) increase in 2024.

In EMEA, car rental rates rose by 10.9 percent to $61 per day in 2020. However, these price hikes aren't expected to continue in 2019. A rise of 3.3 percent to $63 per day is expected in 2023. This will be followed by an increase of 1.6 percent to $64 a day for 2024.

The high demand for events and meetings will also drive up the average daily costs per attendee, from $160 to $169 in this year's budget and $174 by 2024. ADRs for group bookings are also expected to increase from $294 in 2020 to $321 by 2024.

"We think it's unlikely that hotels and other suppliers will have the same ability to increase rates as they did in 2022," added Johnson.

Booking early is important. Travel buyers should plan ahead for the long and medium term. It is important to lock in inventory and book as soon as possible.

Johnson also stressed that corporates should be able to "consolidate" and "leverage" their spending on business travel, meetings and events with their key suppliers in order to get better prices.

Source: businesstravelnewseurope.com