While business travel volumes are expected to continue growing in 2024, air fares, hotel rates and car rental costs are all expected to rise in the year ahead but, thankfully, at a more moderate rate according to several industry reports.
After dramatic price increases in 2022 – albeit from depressed, Covid-induced lows – the rate at which travel costs rose in 2023 slowed, and will do so again in 2024. Average air fares, hotel rates, and car rental costs are all expected to increase by between 1.8 per cent and 3.6 per cent (see below for all the details).Business travel budgets are also poised to increase, but to what extent will be determined by ongoing inflationary pressure and geopolitical tensions – particularly the ongoing conflicts in Ukraine and Gaza. Both will also affect Europe’s air traffic capacity in the year ahead. Nevertheless, IATA expects 2024 capacity to increase 8.8 per cent versus 2023 and to be 7 per cent greater than in 2019.
Northstar Travel
With more organisations operating flexible, hybrid or remote working models, the need to bring teams together to meet face-to-face will continue into 2024, with internal meetings set to drive growth in the global M&E market over the next 12 months. As such, meeting budgets are also increasing, with spend expected to rise by 2.8 per cent in Europe in 2024.
As seen in 2023, the urgent need to reduce travel-related carbon emissions will continue to weigh on both travel buyers and suppliers. According to a recent study, multimodal trips now account for almost a third of business journeys in Europe, with rail set to become a more prominent feature in corporate programmes moving forward. However, delays in EU regulation regarding emissions standardisation and multi-modal ticketing may hinder progress.
Revisiting the 2023 Outlook
Looking back at our 2023 Outlook published in December last year, cost concerns and fears of increased geopolitical instability all appear warranted.
Several contributors, such as the BTA’s Clive Wratten, called for greater collaboration to drive sustainable business travel initiatives, but the significance of EU-level regulation in actioning change was seemingly overlooked. BT4Europe, the body that represents 13 business travel associations across Europe, made this a priority in 2023 and will continue to support proposed changes on transport, sustainability and digitalisation into 2024.
Supply chain disruption and an ever-evolving tech landscape were also flagged among contributors. Julia Lo Bue-Said, CEO of the Advantage Travel Partnership, rightly predicted ongoing content complexity and significant operational gaps when it comes to NDC capabilities.
Several others pointed to ongoing challenges related to staff shortages. Independent consultant Chris Pouney even suggested that AI and robotics process automation could allow travel managers “to truly get out of the weeds” and free up time to deliver more strategic solutions to their companies. However, no one anticipated the extent of the hype surrounding ChatGPT and generative AI in 2023 or the speed at which generative it could improve efficiencies in the business travel sector. In fact, some corporate travel managers are already piloting new AI integrations to explore different use cases, while others believe 2024 will see an even more widespread adoption of AI and chat technologies to replace human-based services.
Read on to find out what our contributors believe is coming down the pipe in 2024, followed by a round-up of key industry price forecasts for the year ahead.
Tags: Business Travel, Europe
