Deloitte has released a report on the current status of corporate travel showing its trajectory back to 2019 levels, however there are two points that show that the outlook for corporate travelers may not be what it seems.
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Deloitte Corporate Travel Overview
Management consulting giant Deloitte has published a report on the state of corporate travel and the segment’s growth potential in 2022 and beyond. Overall, the pandemic and its delayed effects have significantly reduced corporate travel spending compared to 2019 levels. However, as the world recovers, so does the business trip.
However, Deloitte shows that only 36% of 2019 spending has returned this year. The study interviewed corporate travel managers and compared actual costs with projected ones. Most business travel programs are spending far less than expected, and researchers expect that return to be declining.
“When Deloitte conducted its first corporate travel survey3 in June 2021, corporate travel spending was about 10% of pre-pandemic levels. But the rebound seemed to be just around the corner. Vaccines have been widely available in the United States for several months, with many companies planning to have employees back in the office by the fall.
A month later, the delta was named a concern option, and many large companies pushed back their plans. The omicron variant followed the delta, bringing further destruction. Corporate travel spending grew during the third and fourth quarters of 2021, but not at the pace that tourism managers expected. In a June 2021 survey, 34% of corporate travel managers expected to reach half of 2019 travel spending by the end of 2021. However, only 8% did so.[.]– Deloitte
The study used the moods of corporate tourism managers and compared them with checks for the same period. While many were expecting travel options to return sooner than they did (the US just dropped the requirement to test negative for COVID-19 today), even after this return, there are a few issues waiting for the report and its respondents.
First, the figure is based on corporate travel expenses, not net travel bookings. That’s why it’s important. In 2019, hotel and flight prices were much lower than they are now. Some hotel chains are reporting a 25% increase in room prices, others are even higher. Airfare was on the nose…