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See how to save your company time and money on business travel
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Business travel was hit hard by the 2020 health crisis
- International mobility decreased by 65% due to COVID-19 - the lowest rate of travel since the introduction of the Boeing 707 in 1958 which marked the start of the Jet Age (McKinsey).
- Following 10 years of predictable growth, the losses sustained by corporate travel in 2020 were 10 times larger than those seen after 9/11 and the 2008 recession (Global Business Travel Association).
- It’s estimated the travel industry will lose $820 billion of corporate travel spending due to the coronavirus pandemic (CNBC).
- Reduced spending on travel cost the U.S. economy $162 billion in 2020 alone (U.S. Travel Association).
- 2020 saw two-thirds of flights put out of action, and 18 airlines declared bankruptcy (McKinsey).
- While business travel was down by 90% at the height of the pandemic, some companies saw work travel return to about 80% of pre-pandemic levels when restrictions eased over the summer (McKinsey).
- In 2020 hotels were at 29% occupancy worldwide, compared with 72% occupancy over the same period in 2019 (McKinsey).
- In 2020 travel managers reported annual travel spending was only 5-15% of the previous year’s totals (McKinsey).
- Research has revealed that, on average, it takes 5 years for airline services to return to normal levels after unexpected events like the pandemic (IATA).
Never fear—business travel is bouncing back
- After losses of 52% in 2020, corporate travel is predicted to generate $842 billion in spending in 2021 (GBTA).
- 30% of employees would accept roles with a lower salary if the position offered more opportunities to travel (Booking.com for Business).
- 64% of workers believe in-person contact is vital for building trust, with 53% stating they have more faith in face-to-face sales situations than online prospectors (TravelPerk).
- 53% of survey participants believe their industry requires face-to-face meetings. HR teams, in particular, think that in-person contact is crucial, with 67% of respondents stating their sector would collapse if meetings were forced online (TravelPerk).
- Virtual meetings may not reap the best results, with 60% of employees claiming they prepare more for face-to-face meetings than online alternatives (TravelPerk).
- For every dollar they spend on business travel, organisations reap an extra $12.50 in revenue (TravelPerk).
- The business travel market is expected to recover and hit $829.5 billion by 2027 (ReportLinker).
- Almost 100% of corporate travellers enjoy the time they spend travelling for work (NationalCar.com).
- 90% of corporate travellers want to carry on taking work trips for the duration of their career (SavvySleeper).
- While it’s hard to say for sure when business travel will return to pre-pandemic levels, we’re seeing some interesting domestic recovery trends already. In Europe, domestic travel in Germany was at a low point back in April 2020 at only 8%. However, by September, this reached 71% of pre-pandemic levels! Something similar happened in Spain, where domestic travel was as low as 1% in April and rose to 45% in September when the restrictions were relaxed (TravelPerk proprietary data).
- Business travellers started travelling domestically before international travel resumed. U.S. business travellers are leading the charge at 47% recovery as of January 2021. That’s followed by Spain at 25% domestic recovery, and Germany at 12% (TravelPerk proprietary data).
- Domestic business travel in China is already bouncing back - in fact, only 2% of respondents to this McKinsey report had taken a domestic business trip before May 2020, whereas 25% of respondents had taken one by August of the same year.
- According to our own survey, 50% of companies have implemented new corporate travel policies for the next normal (TravelPerk).
- In a 2020 survey, 30% of participants believed their organisation would spend 30% of their annual travel budgets on client meetings in 2021, increasing 6% on 2019 spending (Statista).
- The proportion of female business travellers is growing. In the USA, 47% of business travellers are now women (CreditDonkey).
You'll travel a little differently than you did before
- Over half of business travellers surveyed said that travel restrictions put them off booking arrangements for fear of not having them refunded. More flexible cancellation policies will continue to be key (GlobalData).
- Travel managers planning a return to travel are mainly concerned with (McKinsey):
- Being able to reach providers to change or cancel flights easily (70%)
- Having access to security fast lanes (69%)
- Maintaining social distancing through spacious seating on flights (66%).
- Your travel planning windows will be shorter. You’ll look for tickets and accommodation closer to your departure date than you did before. Data from our own platform reveals that searches for trips less than 6 days away are now almost equal to searches for trips between 7 and 30 days away. Before the coronavirus pandemic, the vast majority of trips were searched for and planned 7 to 30 days in advance (TravelPerk).
- Rail travel will boom over air travel and is already leading the path to recovery. Our own data shows that 80% of domestic trips in Germany are being booked on trains (TravelPerk). Furthermore, nearly 50% of passengers now find reducing their carbon emissions and sustainability more important than they did before COVID-19 (GlobalData).
- Airfares could rise by as much as 54% in a post-pandemic world. This will be due to the growing need to keep planes at a higher standard of cleanliness than before, more contactless solutions, and 24-hour service at airports. Travel managers will therefore need to find ways to optimise their business travel spending and consider savings as a significant part of their company’s travel policy (BBC).
The cost of business travel
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- In 2021 the United States led global spending on corporate travel with a bill of $322.42 billion (World Bank)
- The cost of the average American business trip is $1293. While domestic trips average at $990 per itinerary, for international ventures, the number rises to $2525 (Runzheimer and Expert Market)
- Domestic flights within the U.S are increasing in cost, with roundtrips averaging around $330 compared to $235 at the start of 2022 (Travel Pulse)
- In 2020 the breakdown of spending for business trips was 34% for accommodation, 27% for air tickets, 27% for meal costs and 19% for car rental (Travel Pulse)
- In 2022 the IRS's recommended per diem rate for meals and other incidental costs for US business travellers was set at $59, and the average cost for accommodation was set at $96 per night (Federal Pay)
The US is getting expensive, like Switzerland
- In a 2019 survey, New York City took the top spot for the most expensive city for corporate travel, with per diem spending averaging $799. Coming in second was Zurich, with an average spend of $661 per day and closely followed by Washington DC ($621) and Paris ($617) (ECA International).
- In Asia, Hong Kong came in first as the most expensive city for business travellers, with the average daily spend coming in at $515 (ECA International).
- Joined only by Paris and Reykjavik, the United States and Switzerland are home to 8 of the world's top 10 most expensive cities for corporate travel. Los Angeles, New York, Washington DC, and San Francisco made the list for the USA, while Geneva, Zurich, Bern, and Basel made up the Swiss contributions (ECA International).
- Perhaps unsurprisingly, Geneva was ranked top for most expensive business trip destinations in Europe in 2019, with other Swiss cities also featuring heavily in the top 6 (ECA International).
Tech innovators and unicorns travel differently
Disruptive tools, technology and trends
- The number of Airbnb bookings among tech companies doubled from 2017 to 2018 (TravelPerk).
- Millennial business travellers employed by tech companies prefer non-chain hotels and low-cost air carriers. 85% of them booked low-cost airlines in 2018 (TravelPerk).
- 74% of millennial travellers have stayed in a rental property while on a business trip compared to 38% of Generation X travellers and 20% of baby boomers. 44% of millennials stated they preferred staying in Airbnb-style rentals while travelling for work (Hipmunk).
- Tech travellers break with company policy less than those in the consulting industry. On average, tech companies report 13% of itineraries are not technically compliant with travel policies compared to 16% from consulting firms (TravelPerk).
- European tech companies have unusual travel hubs: Amsterdam, Stockholm, Brighton, Lisbon, and Copenhagen are among their top destinations (TravelPerk).
- When surveyed, 98% of travel managers claim the most significant metrics are policy compliance, traveller experience and expenditure (ACTE).
Why and how business travellers travel
Most corporate travellers travel just once per year, predominantly to visit clients
- 30% of European corporate travellers fly once per month. 62% travel once per year. 5% travel 21 to 40 times per year (Fly Aeolus).
- 44% of European corporate travellers fly to visit with a customer. 32% fly to visit another company office in a different city (Fly Aeolus).
- In the USA, personal cars are used for 81% of business trips (United States Department of Transportation).
- Group business travel is more common than you might think. 50% of European corporate business trips are for parties of two or more (Fly Aeolus).
- 26% of European business travellers report a direct connection as the top factor influencing their decision when selecting flights. Other primary considerations were price (19%), convenience with existing schedules (23%), and airport location (20%) (Fly Aeolus).
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Business travel industry trends and impact
There’s a push to measure the ROI of travel
- Companies realise $12.50 in incremental revenue for every dollar invested in business travel (Oxford Economics).
- An estimated 28% of current business would be lost if business travel were suddenly cut off (Oxford Economics).
- However, only 13% of corporate travel managers actively measure trip success rate and trip ROI (ACTE).
Travel management metrics need improving
- 80% of corporate travel managers believe that a standard system of measurement would positively impact corporate travel (ACTE).
- 81% of travel managers measure booking statistics like advance bookings, hotel attachment and booking issues (ACTE).
- Only 37% of travel managers measure travel engagement (how frequently travellers interact with the TMC or in-house travel manager) (ACTE).
- 94% of corporate travel managers rely on a TMC or travel agency for reporting (ACTE).
- Only 61% of corporate travel managers use traveller surveys as part of their travel management metrics. These surveys can help gather data on traveller satisfaction and trip success (ACTE).
- 4 out of 5 business travel managers believe enacting a system of metrics could benefit their corporate travel programme (ACTE).
Self-booking and mobile bookings are growing
- 59% of U.S. business travellers always book their hotel themselves and 30% usually book their hotel themselves (Statista).
- In another survey, 69% of business travellers report that they book travel themselves regardless of the type of booking (Skift).
- While desktop bookings still reign supreme, 79% of corporate travellers have completed a business trip booking on their mobile device (LCT).
- Business travellers love live chat. 79% of travel industry businesses saw an increase in revenue when they provided live chat (LCT).
Traveller satisfaction and concerns
What travellers want
- 80% of frequent business travellers feel that they deserve to make time for fun activities during most of their business trips. And fortunately, 79% of them feel that their boss agrees (NationalCar).
- 86% of business travellers say that they know how to successfully manage their personal lives while away from home (NationalCar).
- 61% of travel managers have a system in place to measure their traveller’s satisfaction (ACTE).
- 22% of business travellers would like travel suppliers to remember their personal details for the future (Accenture).
- 67% of travellers would like travel companies to make recommendations based on their previous preferences (Accenture).
- Over 50% of travellers would appreciate real-time notifications and for airlines to rebook their flights automatically (International Air Transport Association).
- Post lockdown, the most significant factor for 70% of business travellers when booking airfares is flexibility. Other key variants are onboard sanitation (63%), flying direct (61%), and hygiene protocols between flights (Skift Research & McKinsey).
What business travellers are concerned about
- Flight delays are the leading concern among U.S. business travellers. The second concern is the dreaded middle seat (Statista).
- European corporate travellers rank the most tiring aspects of business travel like so: 27% say waiting time is the most tiring while 25% choose no direct flights, 22% say riding to and from the airport, 16% say early departure times or late arrivals and 10% say the flight itself (Fly Aeolus).
- What is the number one way to improve the traveller experience? 35% of European corporate travellers report that having to spend less time at the airport is the number one thing they wish they could improve. 23% would like to spend less time on the way to the airport. 26% want better availability of direct flights and the remaining 16% want greater flexibility with their schedule (Fly Aeolus).
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Millennial business travel statistics
Millennials are the most frequent business travellers
- Millennials take an average of 7.4 trips per year (Skift).
- Baby boomers take an average of 6.3 trips per year (Skift).
- 75% of millennial business travellers think that travelling for work is a perk (Hilton Hotels & Reports Survey).
- 65% of millennial business travellers see it as a status symbol (Hilton Hotels & Reports Survey).
- 34% of surveyed employees revealed they have their most innovative ideas while travelling for work. When analysing the data from 16-24-year-old respondents, this number jumps to 53% (TravelPerk).
Most millennials are happy with their ability to self-book...but are they using company approved sites?
- 72% of millennial business travellers are satisfied with their ability to book business travel on a third-party site (Statista).
- Hotel bookings are extremely fractured. 28% of millennial business travellers book hotels directly on a hotel’s website. 10% book hotels through an OTA like Expedia. 7% book with a third-party reseller like Kayak. 14% book with a travel agent (Skift).
Millennials value free time and leisure time during business travel
- 43% of millennials have extended their business travel trip for leisure (Statista).
- 78% of millennials have purposefully carved out personal time during a business trip (Forbes).
- 57% of companies have a policy in place for employees who wish to extend their business trip with vacation time (Forbes).
- Millennial men are twice as likely to believe they should avoid having fun on a business trip, 41% versus 20% (NationalCar).
Business versus leisure travel statistics
Bleisure is climbing
- Bleisure trips grew 20% from 2016 to 2017 (Forbes).
- More than 40% of business trips are extended for leisure purposes (Expedia).
- Bleisure travellers are typically frequent business travellers: 32% of bleisure travellers travel for work once or twice per month (Expedia).
- Business trips for conferences or conventions are the most likely to become bleisure trips. 43% of trips for these types of events will turn into bleisure trips, while 24% of trips for team offsite meetings and 9% of sales trips will be a bleisure trip (Expedia).
- 84% of bleisure trips that are less than three days take place in one city, while 20% of bleisure trips that are longer than three days take place in more than one city (Expedia).
- Why do business trips turn into bleisure trips? 66% percent of bleisure travellers say it's because they like the destination and want to explore it. 51% said they turn business trips into bleisure trips based on the proximity to the weekend (Expedia).
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The proportion of business travel spend versus leisure travel spend continues to grow
- Each year, the proportion of business travel spend grows by about .05%. In 2017, the most recent available year, business travel accounted for 30% of all travel spend in the U.S. (Statista).
- While business travellers typically make up just 12% of all flyers, they are twice as profitable to airlines because they are loyal and use frequent flier programmes, buy amenities like extra legroom, and also book more flights with less notice (Investopedia).
Rogue bookings
Do business travellers comply?
- 60% of companies have a corporate travel policy in place, and 50% of companies allow travellers to book using any method they choose (Lodging).
- Hotels are most frequently booked outside of the approved channel. 46% of business travellers have booked hotels on consumer sites because they found a better price (Lodging).
- 52% of employees feel their organisation’s corporate travel policy moderately aligns with the company’s wider culture (Medium, 2017).
- Only 69% of business travellers feel they can comply with their organisation’s corporate travel policies (Lola.com, 2019).
- Using a travel management tool can help improve compliance with corporate travel policies. An advanced booking solution can assist organisations in raising their compliance to 100% through powerful automation systems.
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