Corporate travel is showing signs of growth that will surpass pre-pandemic levels, but budgets are being carefully and closely managed.
In its most recently published Global Travel Trends Report, FCM Consulting saw steady booking volumes in Q1-2024, with longer lead times and more time away. While this is welcome news for TMCs and agents, budgets are anticipated to be tight for the remainder of the year.
“Travellers are managing budgets tightly by making early bookings and spending more days away on trips. This trend is expected to continue into Q2-2024, supported by the positive economic outlook. While prices are higher than 2019, with global economy class airfares up an average of US$45 (R842) and hotel night rates up $18 (R337), demand remains robust,” Bonnie Smith, GM of FCM Consulting South Africa, tells Travel News.
Data from The Advantage Travel Partnership and Travelogix's Global Business Travel Review shows that the number of bookings in 2023 were 8% lower than 2019 levels. It is expected that 2024 volumes will be at least 6,2% higher than the 2019 figure. Although the demand for travel is evident, one of the challenges is that corporates are now paying prices that are 44,8% higher than pre-pandemic levels, which could potentially strain budgets.
Corporate travel is key to Travel Counsellors’ business, and in 2019 this market made up 83% of its business. An area of opportunity that Travel Counsellors has since developed is having two distinct areas of focus – one for its corporate clients and the other for its leisure clients.
As Mladen Lukic, MD of Travel Counsellors South Africa, highlights, the numbers the company is seeing are positive but do not account for inflation or other factors, such as the influence of elections on traveller sentiment, as was the case for South Africa during the past week.
“We have the ability to recognise how purchasing habits are affected and a better understanding of how this impacts our clients,” he says.
Lukic adds that Travel Counsellors has seen more success since it streamlined its business, and its corporate business has grown by 41% since 2019.
“It is clear there is a pent-up demand for corporate travel and unless there is something unpredictable on the horizon, we forecast this market will grow much further,” he concludes.
