Global business travel and events costs are set to climb higher through the remainder of 2023 and into 2024, albeit at a much more moderate pace than the exceptionally steep increases seen in 2022. This is according to the 2024 Global Business Travel Forecast, published by CWT, the business travel and meetings specialist, and the Global Business Travel Association (GBTA),

Rising fuel prices, labor shortages, and supply chain challenges, coupled with strong demand, caused travel prices to skyrocket in 2022 – far surpassing some of the increases outlined in last year’s forecast. Lingering economic uncertainty and a gradual easing of supply-side constraints are expected to result in more subdued price increases over the next 12-18 months, according to the report, which uses anonymized data generated by CWT and GBTA, with publicly available industry information, and econometric and statistical modeling developed by the Avrio Institute.

Patrick Andersen, CEO of CWT said that a potent combination of demand and supply-side pressures propelled prices higher than expected last year. Looking forward, he said, prices seem to be leveling off with much milder increase projected over the next 12 to 18 months. “We could now be looking at the true cost of travel,” said Andersen.

Suzanne Neufang, CEO of GBTA, said the research shows that rising costs and pricing pressures will likely continue to be a significant factor in business travel for the foreseeable future. And as has been the experience over the past few years, she said, the industry may also continue to see different pricing fluctuations across industry verticals, business sectors and global regions.

Among the report’s projections:

• Average air ticket prices are likely to grow at 2.3% in 2023 and 1.8% in 2024, albeit from an already high base. Still, many corporate buyers now have less leverage to negotiate with airlines, as their travel volumes remain below pre-pandemic levels.
• With fewer properties to compete against, existing hotels can sustain their pricing power for longer, even though average daily rate (ADR) gains are slowing. ADRs are projected to climb a further 4.3% in 2023 to $168, followed by a 3.6% increase to $174 in 2024. ADRs in North America are forecast to rise 4% to $181 in 2023 and 3.3% to $187 in 2024.
• Supply issues drove car rental prices to large rate increases. These factors have contributed to prices rising by 9.8% year over year in 2022, with a further 6.7% increase forecast this year. Pricing growth is expected to cool to 2.1% in 2024.
• With a stronger-than-expected recovery in meetings and events, the average daily cost per attendee was $160 in 2022. This is expected to increase to $169 in 2023 and then $174 in 2024.