The end of high-flying business travel: New report predicts “New normal”

A new report by Morning Consult suggests that the era of extravagant business travel is over for good. The report, titled “Business, but Not as Usual,” declares that tighter budgets and virtual working have led to a permanent shift in business travel, and a new travel model is slowly becoming entrenched. The report also points out that the demographics of business travelers are changing, with younger travelers more likely to fly in economy class and earn less than $50,000 a year.

According to Morning Consult’s survey of 4,400 Americans, business travel trips stagnated in the United States last year, rising only 1% in 2022. The report says that compared to before the pandemic, fewer people are traveling for business and those who are traveling are doing so less often. Respondents also noted that their companies had changed their business travel policies, with 60% reducing the frequency of business trips and 56% sending fewer employees on trips. In addition, 54% said companies are more closely scrutinizing travel expenses too.

Deloitte’s corporate travel study also published this month, reveals that one in seven US companies and one in five European companies expect sustainability efforts to reduce corporate travel in 2023. The report states that climate concerns will likely affect corporate travel gains for years to come, and a third of American companies and 40% of European companies indicated the need to reduce employee travel spending by more than 20% to meet 2030 climate goals.

While trips may not be increasing much, corporate spending on business travel is rising fast, according to Deloitte’s report. Corporate travel spending in the US and Europe nearly doubled last year and is on track to reach pre-pandemic levels by late 2024 or early 2025. However, companies are having to spend more because of inflation and higher travel costs. Companies are choosing cheaper lodging (59%), booking cheaper flights (56%), and limiting travel frequency (45%) to save money, according to Deloitte.

Despite the challenges, there are several bright spots for business travel. According to Deloitte, international business trip spending is expected to pick up in 2023, mostly for client work in Europe, and to connect with global colleagues at conferences in the US.