There has been a gradual consistent growth in business travel trips to start the year with that growth forecasted to continue into the next quarter, according to the latest Global Quarterly Trend Report from FCM Consulting, a division of FCM, the TMC.
With traveller confidence on the rise and an incremental growth in demand, the data suggests that pricing is expected to remain strong across the industry. Global economy airfares were up $45 (11%) and business class tickets were up $224 (12%) in January 2024 compared with January 2019. In North America, economy ticket prices were up 15% and business fares were up 9%. But encouragingly, global economy ticket prices actually dropped 16% in January, when compared with January 2021.
Given the economic outlook is trending in a relatively positive direction, corporate travel budgets are starting to increase this year. However, despite the steady volume of trips, geopolitical events can often bring a level of uncertainty to the economy. Therefore, businesses are also closely monitoring their budgets and travelers are shifting some of their booking behaviors and preferences to maximize spend.
One key trend that the report highlighted is that business travelers are booking trips more in advance, as well as taking longer trips. The average advanced booking days have increased to 23.3 (up 1.5), while the average days away have increased to 4.4 (up 0.3).
Ashley Gutermuth, Head of FCM Consulting, Americas, said that “given the increased demand and positive economic outlook, it’s been an encouraging sign to see companies start to increase their corporate travel budgets and further embrace the return to the air.”
Another key trend that has continued on the supply side this year – more seats with fewer flights. The forecast for North America is that there will be 9% more seats and 7% fewer flights offered between May and December 2024, compared with 2019. The global forecast is that there will be 3.6% more seats above the 2019 averages, signalling supplier confidence across the world. Furthermore, the forecast of seats offered by the top global airlines is set to be up 6% above 2019, with the number of flights down 1%. Low-cost carriers have also been performing well, representing over 31% of global seats offered in 2024 to date.
On the accommodation side, the average room rates (ARR) in North America increased just $5 (2%) in the first quarter, compared with the same quarter last year. Some of the cities seeing the largest rate increases include New York, Denver, and Vancouver, while Los Angeles, Boston, and Mexico City saw some of the largest rate decreases. The report also analyzed the car rental market and the global average daily rate (ADR) this past quarter was $51, a $22 drop in price from the 2023 ADR.
