CWT and GBTA Publish Results from Global
Business Travel Forecast for 2024
Global business travel and events costs are set
to climb higher through the remainder of 2023 and into 2024,
albeit at a much more moderate pace than the exceptionally steep
increases seen in 2022.
That is the finding of the 2024 Global
Business Travel Forecast, published on Thursday by CWT, the business travel and meetings
specialist, and the Global Business Travel Association (GBTA), one
world’s largest business travel trade organizations.
fuel prices, labor shortages, and supply chain challenges, coupled
with red hot demand, caused travel prices to skyrocket in 2022 –
far surpassing some of the increases outlined in last year’s
Lingering economic uncertainty and a gradual easing of
supply-side constraints are expected to result in more subdued
price increases over the next 12-18 months, according to the
report, which uses anonymized data generated by CWT and GBTA, with
publicly available industry information, and econometric and
statistical modeling developed by the Avrio Institute.
“A potent combination of demand and supply-side pressures
propelled travel prices higher than expected last year,” said
Patrick Andersen, CWT’s Chief Executive Officer. “Looking forward,
prices seem to be levelling off with much milder increases
projected over the next 12 to 18 months. We could now be looking
at the true new cost of travel. Our focus remains on helping our
customers find the right strategies and solutions to get the most
out of their travel budgets, meet their ESG commitments, and
maximize the ROI on their travel spend.”
“As this research
outlines, it’s clear that rising costs and pricing pressures will
likely continue to be a significant factor in business travel for
the foreseeable future. And as we experienced over the past few
years, we may also continue to see different pricing fluctuations
across industry verticals, business sectors and global regions.
While business travel continues to rebound, there will be a
continuing balancing act among demand, cost, and ESG concerns. So,
with a forecast ahead for more volatility, our goal is to provide
insights like these to help travel buyers, suppliers,
intermediaries and finance executives continue to understand,
evaluate and adjust their business travel strategies,” said
Suzanne Neufang, Chief Executive Officer, GBTA.
global average ticket price (ATP) of flights booked for business
travel rose dramatically in 2022, experiencing record price
increases. The ATP rose by 72.2% YoY to $749 in 2022, far
surpassing 2019 levels ($670). While demand has recovered strongly
with passenger numbers quickly approaching pre-pandemic levels,
driven primarily by pent-up leisure travel demand, airline
capacity continues to be constrained by labor shortages and supply
Looking forward, ATP growth is likely to be more
modest at 2.3% in 2023 and 1.8% in 2024, albeit from an already
high base. Still, many corporate buyers now have less leverage to
negotiate with airlines, as their travel volumes remain below
At $855, the Europe, Middle East, and
Africa (EMEA) region recorded the highest ATP in 2022, compared to
other parts of the world. This represents a 31.5% increase from
2021. More modest price increases are expected going forward, with
ATPs predicted to rise 2.9% this year and 2.2% in 2024.
However, in terms of year-on-year growth, the ATP in Asia
Pacific climbed 148.7% YoY in 2022 to $567 – the biggest increase
seen in any region, despite a lack of international travel demand
Key business travel destinations, including Australia
and Japan, fully reopened to vaccinated travelers and resumed visa
exemption arrangements. Average airfares rose 75.3% for Australia
and 79.3% for Japan in 2022, with a sharp rise in the share of
long-haul tickets. As airlines in the region – particularly the
major carriers from China – continue to add more international
route capacity, the increased supply should help ease price
pressures in the region, with ATPs forecast to rise 4.8% in 2023
and 2.7% in 2024.
Like air travel ATPs, the global
average daily rate (ADR) for hotel bookings exceeded earlier
predictions, rising 29.8% YoY to $161 in 2022.
have been high, but so have labor, energy and food and beverage
costs. In fact, several cities across the globe including London,
Miami, and Singapore, reported their highest ADRs on record in
Meanwhile, hotel construction remains down from its
pre-pandemic peak, creating supply constraints. With fewer
properties to compete against, existing hotels can sustain their
pricing power for longer, even though ADR gains are slowing. ADRs
are projected to climb a further 4.3% in 2023 to $168, followed by
a 3.6% increase to $174 in 2024.
North America saw the
highest growth in hotel ADRs of any region in 2022, rising 33.8%
YoY to $174. Occupancy in the region is expected to grow at a
slower pace in the second half of 2023 and 2024 due to economic
concerns, with ADRs forecast to rise 4% to $181 in 2023 and 3.3%
to $187 in 2024.
ADRs in Latin America also rose sharply by
26.9% YoY in 2022, as several countries in the region experienced
double digit inflation. Now, with inflation appearing to have
peaked, and ADRs are expected to grow by 9.1% in 2023 and 5.6% in
Car rental supply has been
constricted as companies sold vehicles during the pandemic when
demand collapsed. As business returned, vehicles were not replaced
at pace due to supply chain issues, largely due to a worldwide
shortage of vehicle semiconductors which led to inflated vehicle
prices. These factors have contributed to prices rising by 9.8% YoY in 2022, with a further 6.7% increase forecast this year.
Pricing growth is expected to cool to 2.1% in 2024.
In-person meetings and events have
rebounded more robustly than many had expected. Client acquisition
and relationship building are key business goals that are not
easily executed virtually. There has also been exceptionally
strong demand for incentive trips, as companies seek to motivate
and reward employees. In fact, CWT Meetings & Events has observed
these trips becoming longer and more frequent and expects the
trend to continue.
The average daily cost per attendee was
$160 in 2022. This is expected to increase to $169 in 2023 and
then $174 in 2024.
Lead times for events remain short in
this post-pandemic world. However, organizers should now look at
2024 with a 12-month planning cycle if they want to keep prices at
a reasonable level. At the same time, consolidating transient
travel and M&E spend can give buyers more leverage when it comes
to negotiating pricing.
The figures in the report are based on data from
more than 70 million ticketed flights, over 125 million hotel room
night bookings and more than 30 million car hires covering data
from 2018 to the present.
The projections are based on econometric and
statistical models, specifically ARIMA models, developed by the
Avrio Institute. Insight is provided by CWT personnel and market
The full report can be viewed online or
downloaded as a gated PDF