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Key findings on business travel prices in the first half of 2023
- Airfares and hotel rates are showing stabilization in the second quarter (Q2) of 2023, with average price increases trending significantly lower than the same period in 2022.
- After a +47% increase year over year (YoY) in Q2 2022 based on average customer booking value, airfares for flights departing the US, UK and Europe began to normalize in Q2 2023 (+2% YoY).
- Since peaking in Q2 2022, the average cost of US airfares has remained virtually constant between Q3 2022 through to Q1 2023. In Q2 2023, the price of flights departing the US increased by only +1% YoY, much less than the European (including UK) average (+9% YoY).
- Incentives in various European countries, including Spain, may be driving train ticket prices down below pre-pandemic levels. Compared to the same period in 2019, in Q1 and Q2 2023, train prices dropped -23% and -15% respectively.
- Hotel prices see a more settled inflation trend in Q2 2023, with only a +4% increase in hotel booking daily rates compared to +59% in the same quarter the previous year.
Travel inflation: Factors influencing price changes in the US & Europe
- Pent-up demand post-COVID for business and leisure travel. This increased appetite for travel had a direct impact on the cost of transport and accommodation.
- Energy price inflation resulting from the war in Ukraine.
- Numerous strikes, cancellations, and travel disruptions in the Summer and Fall of 2022 which subsequently caused prices to increase.
A closer look: Business travel prices by vertical and region
How flight prices are shifting in the UK, US, and Europe
We see the biggest impact on flight price increases in Q3 2022 (+61% YoY), but this begins to stabilize quarter over quarter as we move into the first half of 2023.
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No more turbulence – Flight prices stabilize in the U.S.
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The view from the other side of the Atlantic
It’s worth mentioning the European flight inflation of +69% in Q3 2022 is the highest increase in YoY prices for this segment, compared to other travel verticals and regions.
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Checking in: The top trends in hotel rates
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Railway rewards – train prices drop in the first half of 2023
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3 top tips to help beat inflation for business travelers
- Be flexible with travel options – The impact of inflation isn’t the same in every region, as demonstrated in our report. So, business travel managers should consider more budget-friendly routes and destinations that are less impacted by rising costs. Do you really need to host your team offsite in London? Or could you save on travel expenses by choosing another city in Europe? You could make significant savings to the overall cost of your business travel by being more flexible with destinations. Rail prices have increased less than flights, so consider taking the train if you have the option. It could be a smarter choice both for your budget and the environment!
- Book in advance – Our data shows that business travelers continue to book international trips and domestic trips much closer to their departure date than they were pre-pandemic. The biggest savings are often found the more you book ahead (especially with airfares). With much of the chaos and uncertainty behind us, there is a significant economic benefit to booking early. Plus, with flexible travel options like FlexiPerk, should your plans change, you can cancel up to 2 hours before departure and get 80% of the cost of your trip back, no questions asked.
- Make the most of negotiated rates - Business travel management software like TravelPerk uses the combined buying power of their customers to negotiate rates on accommodation and travel and pass these savings on to their customers. In fact, there are over 26,000 negotiated hotel rates to choose from with savings up to 25% when you book with TravelPerk. With its industry-leading inventory, TravelPerk makes business travel more affordable and a lot simpler to manage.
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