Business class seats are filling up, but not quite at the levels they did in 2019.
Business travel is set to steadily--but not exponentially--rise throughout the rest of 2022, according to a new trend report from Deloitte. The annual spend on business travel is expected to reach 55 percent of 2019 levels by the end of the year, according to a survey of 150 travel managers conducted in February. These figures fall short of travel managers' predictions made in 2021.
There are a few factors to blame for the sluggish return. Covid-19 variants have not only caused many workplaces to delay their return to the office, but two-thirds of companies say they've pushed back their business travel plans, and 15 percent are "seriously rethinking" their travel policies more generally. The recent end of mask mandates across airlines may also play a role in how businesses consider their travel plans in the year ahead.
Concerns about increasing flight and other transit costs have also risen since 2021, Deloitte's research finds. According to research from the aviation consulting firm Boyd Group, airfares this year are estimated to go up by 20 to 40 percent, compared with pre-pandemic prices. The uptick can be attributed to an increase in fuel prices due to the war in Ukraine. Higher fuel prices should have an impact on a wide swath of businesses that depend on corporate travel, like hotels and car rental companies, and it should continue to roil supply chains. U.S. hotel business revenue for 2022 is projected to be nearly a quarter below pre-pandemic levels--a difference of about $20 billion--according to a new report released by the American Hotel and Lodging Association.
Businesses that depend on work travel will need to find ways to stay afloat until corporate trips get back up to speed--which, according to Deloitte's research, could still take two to three years.