Business

Business travel spending is expected to rise through 2023, the report says.

Passengers wait for flights with their luggage at Heathrow Airport in London.

Luke McGregor | Reuters

From hotels to airfare, the cost of business travel, from hotels to flights, will rise through 2023 as demand returns more than two years after the start of the Covid pandemic, according to an industry report released on Wednesday.

According to a report from travel management company CWT and the Global Business Travel Association, airfare for business travel will rise nearly 50% this year compared to 2021, after two years of steep declines. According to the organizations, tariffs will increase by more than 8% next year.

Airline and hotel executives have been optimistic about a return to business travel after Covid-19 and containment measures such as travel restrictions forced companies to suspend many work travel.

While leisure travel has surged since the 2020 pandemic low, business travel has lagged behind, depriving hotels and airlines of an important source of revenue. Business travelers or their employers are often less price sensitive than tourists and are more likely to book high-priced rooms or flights.

Last month, American Airlines said domestic business travel revenue, which accounted for almost a third of its passenger revenue in 2019, was 110% higher than it was three years ago, before the pandemic.

This is despite fears of a slowing economy, a shortage of labor in the travel industry and other headaches as some large corporations look for ways to cut costs.

“The unconfirmed feedback we’re receiving as fall approaches is that people are having to travel more,” Chris Nassetta, CEO of Hilton Worldwide, said during a July 27 earnings call. “While people are worried about where the macro environment is going, they have to manage the business. And in fact, the more they worry, the more they realize they need to get out there and make sure they’re a fuss.”

An industry report says hotel prices around the world are likely to exceed 2019 levels next year.

Major events such as industry conferences are also back, such as the Farnborough International Airshow last month. But prices are rising, and the cost per visitor will rise 25% this year compared to 2019, the report says.


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