After a rebound in business travel growth that exceeded many analysts' predictions, the forecast for 2023 promises more change and accelerated growth for corporate travel programs. While economic uncertainties loom ahead, the past few years have uniquely prepared travel to withstand any blows a potential recession might deal.
In fact, 75% of travel managers surveyed in a recent GBTA poll indicated their companies have no immediate plans to reduce business travel due to economic uncertainties. This may be attributable to a shift in priorities; most organizations have already right-sized their goals and budgets for a post-pandemic world of travel. Add to that the resurgence of face-to-face meetings, a growing hybrid workforce, and an industry that is putting sustainability front and foremost and a clear horizon emerges for travel.
Below we dig into these trends and examine how the economic headwinds ahead may impact your corporate travel program in 2023.
Increased Domestic Travel
As the pandemic waned, serious geopolitical issues took center stage due to the war in Ukraine. This forced travel managers—particularly those at large, global companies—to implement enhancements to their risk management platforms and to update their travel policies.
This sudden outbreak in long-simmering tensions resulted not only in risk management concerns for companies conducting business in Eastern Europe but also in increased fuels prices that drove up travel costs across the board. Although the ongoing war still poses many serious implications, travel buyers can find reprieve in a forecast from the Energy Information Administration (EIA), which projects a decrease in 2023 fuel prices to $3.57 a gallon compared to the $4.05 average in 2022. This cost may help keep domestic travel costs from rising further, as these savings get passed along to the consumer.
The stabilization of inflation at home coupled with recession fears and conflict abroad will likely give domestic travel a boost over international travel, which still lags behind in the recovery process. The latest forecast from the U.S. Travel Association confirms these findings, which projects a full recovery for domestic travel in terms of volume by 2024.
For business leaders, it is important to take into account these factors when considering investments and travel plans for the year ahead. Domestic markets may be a better place for growing and emerging businesses to invest their time and money, while companies with a larger international footprint should conduct a comprehensive analysis with their travel management company (TMC) before expanding to new international markets.
Hybrid Workers = Travellers
As employers contend with retention incentives and talent acquisition challenges, the modern workspace has shifted to accommodate remote work on a massive scale. The hybrid model is no longer a sidestep but a progressive way for companies to move forward and staff up, with nearly 70% of companies embracing a hybrid model and 20% going fully remote.
These flexible “work from where you are” approaches to doing business will mean increased travel for departmental meetings, team building experiences, and company-wide events. While larger organizations may already be equipped with a solid travel program in place to handle this evolution, businesses making this transition that were once centered around a single hub will now need to account for a surge in employee travel, including managing lodging, airfare, and car rentals. This is an area where making the move to a managed travel program can alleviate challenges and help keep costs down.
The hybrid model also complements the recent emphasis on using travel as a business method to recoup pandemic losses and stave off potential recessionary impacts. Sales team members need organic, social connections that cannot be replicated solely through online environments. By getting your top performers out of the office and on the road again, you are putting your team in the best position to close the deal and drive revenue growth.
Sustainability Metrics Matter
Green travel has been a talking point in the industry for years, but 2023 may be the year it becomes the norm rather than the exception. Both businesses and travellers alike have become more educated about the effects of carbon emissions and are making a conscious effort to contribute to a healthier planet.
A good starting place is through carbon offsetting, which allows organizations to measure, offset, and reduce their CO2 emissions. At Direct Travel, we launched Direct ATPI Halo to make it easier for businesses to evaluate their travel program and track carbon-related metrics all in one place. The carbon offset projects that Direct ATPI Halo utilizes are selected for their quality, integrity, and effectiveness in addressing global environmental challenges. Projects may involve reforestation, forest conservation, renewable energy investments, or energy efficient community projects.
As sustainable travel takes its place as a truly integral component of any corporate travel program, travel managers will be expected to work across departments to deliver on these green goals, just as they would cost savings initiatives or updates to duty of care policies. Working with a comprehensive tool from your trusted travel partner makes this progress easier to track and report on when it comes time to present to stakeholders.
Weathering the Waves Ahead
If the past few years have proven anything, it is that in times of global uncertainty, you are more prepared to weather the storm when you have the right partners on board with your business. Already 2023 has shown the unpredictable challenges travel can present, including repeated “system meltdowns” that have resulted in canceled flights and stranded travellers.
With Direct Travel as your TMC, you can count on our industry experts to have you and your travellers covered every step of the way when travel disruptions like this occur. Furthermore, we are equipped through our regional model and established supplier relationships to help you source the best fares and rates, which are crucial during times of economic uncertainty.
Is your business ready for the year ahead? Contact our team to schedule a consultation for your travel program to prepare for 2023 and beyond.