Bonnie Smith, General Manager of FCM South Africa, underscores this dual reality. “Yes, travel is getting more expensive, but it’s also becoming more predictable,” she says, urging travel managers to seize the moment for smarter, data-driven travel planning. Her advice comes as corporate travel faces rising business class fares, increased hotel rates, and crowded flights across key global hubs like London, New York, and Dubai.
Rising Airfare Costs and Full Flights
The pandemic-induced lull in global travel has now given way to a travel surge. Airports, once eerily empty, are now bustling with travelers. Passenger demand grew by 8.6% in August 2024 compared to the previous year, leading to an 86.2% flight load factor — the percentage of available seats that are filled with passengers. Business travelers are feeling this pressure firsthand.
Business class fares have seen a 6% to 8% increase from 2023, adding strain to corporate budgets. While economy fares have dipped by 1% to 4%, this offers little relief to companies that prioritize comfort, speed, and productivity for their executives. The days of “last-minute Larry” bookings are over, says Bonnie Smith. Companies delaying their bookings risk paying significantly higher prices.
Strategic planners are urged to book early to avoid price hikes and secure seats on crowded flights. Last-minute bookings, especially to high-demand destinations like New York, London, and Dubai, will likely be met with sky-high ticket prices and limited seating options.
Hotel Prices Skyrocket Across Key Hubs
Hotel rates have also surged, further adding to the cost burden on business travelers. According to the FCM report, the average price of a hotel room in Johannesburg jumped 14%, while the cost of a stay in New York City now averages $490 per night — a 15% increase.
North America saw a 6.8% rise in hotel prices, while South America experienced a staggering 25.4% increase. Rates in Europe also climbed by 5.3%, reflecting the heightened demand for business travel accommodation. While the Middle East, Africa, Asia, and Australia saw slight price declines, these regions remain competitive business destinations that require strategic planning.
With soaring hotel bills, companies are being advised to reconsider their accommodation strategies. Business hotels located just outside major city centers often offer lower rates and better facilities for productivity. “Some of the best business hotels are just a short ride from the city center,” says Smith, emphasizing that location is not everything.
To navigate these rising hotel rates, companies are encouraged to work with Travel Management Corporations (TMCs), which negotiate corporate rates with hotel chains and offer greater flexibility in booking terms.
The Role of TMCs in 2025 Corporate Travel
Travel Management Corporations (TMCs) will play a vital role in helping companies navigate the turbulent travel landscape of 2025. TMCs leverage their buying power to secure better rates on flights, hotels, and car rentals, offering flexibility and support when plans change.
Bonnie Smith highlights the benefits of using a TMC: “We’re booking thousands of room nights and flights, which means better rates and more flexible terms for our clients.” By consolidating purchasing power, TMCs can negotiate exclusive corporate deals that individual companies could not secure on their own.
Additionally, TMCs offer centralized booking systems, allowing companies to track travel expenses, monitor employee movements, and enforce company travel policies. This helps organizations optimize their travel budgets while enhancing employee safety and compliance.
Opportunity for Strategic Travel Planning
Despite rising costs, 2025 offers an unprecedented opportunity for companies to be more strategic with travel. Booking ahead and locking in rates for flights and hotels will be essential for cost control. Early bookings not only secure lower rates but also guarantee better availability of business class seats and preferred hotel rooms.
Companies that invest in travel technology and data analytics can gain a competitive edge. By tracking pricing trends and forecasting demand, travel managers can make better-informed decisions. The rise of predictive travel technology allows companies to anticipate price hikes and secure bookings at the right time.
According to FCM, proactive planning could become the key to thriving in the 2025 corporate travel space. The “early bird” approach has never been more relevant. Booking flights, hotels, and car rentals months in advance will no longer be a suggestion — it will be a necessity.
Airline Seat Expansions in 2025
There is, however, a glimmer of hope. Airlines have announced plans to expand seat availability by 1.8% globally and by 2.1% in Africa in the first half of 2025. While this increase will create more flight options, it does not necessarily mean cheaper fares. As demand for face-to-face meetings remains high, ticket prices are expected to stay elevated.
To take advantage of new route announcements, travel managers are encouraged to maintain close relationships with airline representatives or collaborate with their TMCs. Airlines often bundle new routes with promotional rates or corporate deals, providing companies with a chance to lock in early-bird discounts.
Winning the Corporate Travel Game in 2025
The companies that succeed in 2025’s travel landscape won’t be the ones with the biggest budgets — they’ll be the ones with the smartest strategies. Proactive planning, early bookings, and the support of TMCs will be essential. By locking in rates early, tracking data trends, and leveraging TMC-negotiated deals, companies can minimize costs while maximizing the value of each business trip.
Savvy companies will also diversify their accommodation choices, booking hotels outside city centers or selecting properties with better facilities for productivity. The ability to adapt and stay ahead of changing trends will define success in 2025.
Business travel in 2025 will be shaped by rising costs, but also by newfound predictability. Companies that adopt strategic planning, leverage TMCs, and use predictive travel tools will be better positioned to control costs and enhance value. With early bookings, smarter accommodation choices, and greater access to predictive pricing data, companies can turn the challenges of 2025 into a competitive advantage.
From crowded airports and pricier hotels to smarter booking strategies, the future of business travel belongs to the well-prepared. As airlines expand seat capacity and TMCs offer better rates, companies have every reason to plan ahead and travel smarter. The early bird truly gets the window seat — and the savings
Tags, Bonnie Smith, FCM South Africa, Hotel rates, Airlines, Travel Management Corporations