Research from Emburse forecasts higher business travel airfares

Hotel and airline prices continued to increase through 2024, but discounts have become more aggressive, according to the latest edition of the Business Travel Snapshot from Emburse, a travel and expense management platform.

The report revealed that:

• Market airfares increased by 7.4% from November 2023 to November 2024, while negotiated fares increased 5.4%. However, the discount gap between market and negotiated fares widened from 14.3% to 16.3% during this period, offering enhanced savings opportunities through corporate agreements.
• Hotel market rates increased 5.4% and booked rates increased 4.5%. Again, the discount rate widened to 22.6%, significantly higher than the 5%-10% seen coming out of the pandemic. In particular, Chicago, London and Toronto have seen substantial increases in hotel rates of 12%-14%, while cities like Scottsdale, Barcelona and Boston have moved in the opposite direction, with hotel rate decreases of 4%-11%.

Emburse expects airlines to attempt to increase fares for business travel through 2025 to offset lost revenue from the leisure travel sector. Hotel rates are predicted to rise 5%-7% in the first half in the US and Europe and flatten out in the second half due to lower inflation and greater capacity as hotels open a record number of new properties.

The snapshot outlines strategies for corporate buyers as they enter negotiation season, including how to budget appropriately given rate increases and where to focus negotiation efforts with airlines and hotels. It also explores the impact of NDC and AI on corporate travel.

Steve Reynolds, chief strategy officer at Emburse and author of the report, said that with business travel volumes expected to surpass pre-pandemic levels in 2025, and both hotel rates and airfares expected to increase, corporate travel managers will be looking for ways to predict and manage their spend. In particular, he said, “corporate buyers will start to rely on AI to mine corporate travel and expense data to best predict volumes by market, per diems by location, acceptable rates and fares and more.” 

The data outlined in the report is sourced from Emburse Travel Analytics (formerly Tripbam Analytics) and includes global hotel and air data covering North America, Europe/Middle East/Africa, and Asia-Pacific.