Small to medium-sized businesses are driving the recovery of the US business travel market, reports Skift.com.
Looking at the first-quarter earnings from Delta, American and Southwest airlines, Choice Hotels, Global Business Travel Group, business travel tech company Hotel Reservation Service (HRS) and Hertz, analysts found small and medium-sized enterprises are playing a major role in corporate travel’s comeback. These suppliers are seeing the growth of smaller meetings and hybrid work environments and the continuation of blended travel habits.
Delta Air Lines noted that travel by SMEs during the first quarter had surpassed 2019 levels, with international trips leading growth in the managed corporate travel segment, while American Airlines also said smaller businesses had impacted its latest earnings.
Growth of smaller meetings has played a big role during the first quarter earnings cycle.
HRS spokesman Michael Brophy said: “We think it is important to note that while transient segments from big companies are certainly going to take some time to return to pre-pandemic levels, we are also noticing a remarkable surge in simple and smaller corporate meetings of 50 people or less.” He said smaller gatherings now accounted for 89% of the number of meetings HRS procured for clients before the pandemic.
Blended trips
Delta said the lines had become blurred between high-yield leisure and corporate travel.
Choice Hotels said it was benefiting from blended travel, with bookings rising above pre-pandemic levels, while American Airlines has also seen an increase in blended trips, In the first quarter it saw a mix of 35% leisure, 35% blended trips and 30% business trips.
A Deloitte analysis shows that the full recovery of business travel might only happen late next year or even in 2025 and that the market would be 10-20% smaller in real terms when accounting for inflation.
“Our data indicates that smaller companies were quicker to resume travel overall in 2021 and 2022,” said Eileen Crowley, Deloitte’s travel, hospitality and services leader. “By the end of 2022, half of companies with US$1 million or less in annual 2019 travel spend said they had hit 50% or higher of 2019 levels, versus 40% of bigger companies. But most of that difference looks poised to fade in 2023, as bigger companies catch up.”
The recent Skift Research survey of business travellers in the US, UK, Australia and India showed business development and client site visits were the top reasons for business travel in the second half of last year and into the first three months of 2023.
