THE 2024 OUTLOOK

Pricing pressures

Catherine Logan, regional senior vice president EMEA & APAC, GBTA

Rising costs and pricing pressures will continue to be a significant factor in business travel as we head into 2024, with pricing fluctuations across industry verticals, business sectors and global regions. While business travel spend continues to rebound and grow globally to an estimated $1.5 trillion by the end of 2024, there will be a delicate balancing act between demand, cost management, the distinct needs of the business traveller, and environmental, social, and governance concerns. Notably, ESG will play a pivotal role, driving a greater shift towards purposeful travel to minimise carbon impact. Companies are expected to prioritise sustainable travel programmes, incorporating initiatives like multimodal travel and Sustainable Aviation Fuel, and at the same time balance the priorities of the business traveller as new working patterns continue to evolve.

AI will drive efficiency

Guy Snelgar, global business travel director, The Advantage Travel Partnership

AI has revolutionised the travel industry and in this ever-evolving digital landscape, choices are seen as limitless and customers expect travel recommendations to be based on their individual needs, from the destination through to the itinerary. There is no doubt that recent advances in generative AI are now bringing practical examples that can be a huge benefit to travel management, especially around tasks that involve spotting trends and patterns in vast amounts of data. That could include spotting anomalies in a company’s travel spend reports, refining complex fare search algorithms in the GDS to present the more relevant options more quickly, or learning how to make more personal recommendations to travellers.

Demand won’t slow

Michael Riegel, CEO, Navan, EMEA

Demand for travel has rebounded faster than many expected. The resurgence in demand will come with challenges. Strong demand across international travel has meant that pressure is acute for airlines. Forced to cut capacity in the wake of the pandemic, they are reinvesting to return routes and hire staff. Until the airlines can increase supply, expect continued disruption to flights through much of 2024. In business travel, disruptions will maintain the need for increased levels of support, as travellers will need to be able to change their travel plans on short notice, at a time when specialist staff are already in short supply. Business travel solutions will have to innovate to adequately support customers. There will be increasing reliance on new technologies, such as generative AI, to support customers. AI is already providing human-grade support, but these integrations will need to widen in scope.

Small meetings in focus

Denis Vilovic, co-founder and CEO, TROOP

Following the increase in remote working we’ve seen a notable rise in off-site meetings, with a shift from the big annual company all-hands, to regular smaller internal and client gatherings as companies look to unite dispersed teams. Historically, these meetings, particularly the smaller team or client meetings, have been unmanaged with no true visibility of the total costs involved. But companies today are looking to manage travel and M&E programmes to help drive cost efficiencies and savings. In 2024 the focus will extend beyond formal business travel programmes, to also include M&E, particularly small meetings, prompting companies to reassess how they manage these smaller, historically unmanaged interactions. This is a strategic shift to align M&E with business travel objectives and to integrate smaller meetings into the company travel policy to optimise cost savings and enhance visibility.

Hotels change tactics

Laura Busby, commercial director, Good Travel Management

A growing trend in 2024 will be that of hotels shifting from pushing occupancy to instead growing revenue per room. In short, they will be accepting lower occupancy as they prioritise selling rooms at higher rates instead. Corporations are likely to spend more on hotel accommodation in the coming year. Because of this, we are also seeing an increased trend in certain booking behaviours among customers. More than half (54 per cent) of our customers tend to book flex rates over non-flex rates and as costs continue to rise, we believe this percentage will increase next year. In addition, we predict there will be fewer business trips in 2024, but the ones that do take place will have a longer duration, with companies trying to maximise the ROI of each trip. Our data also shows that low cost carriers now represent one in three fares globally, showing price point is still important for those booking business travel.

Traveller tensions

Amy Padgett, vice president, travel marketing strategy, Concur Travel

As organisations hammer out their business travel plans and policies for 2024, another year of budgetary caution will become a source of rising tension with employees. Although budgets may increase, doing more with less in response to inflation will remain the organisational mantra of 2024. We’re already seeing friction between employees and employers regarding flexibility and hybrid working. The increasing Gen Z workforce representation will also drive employers to adopt the latest technologies and treat sustainability as a top organisational priority to compete for young talent. As organisations increasingly explore cost-cutting measures, like requiring that employees stay in less expensive accommodation, enthusiastic business travellers are likely to put the pressure on employers to better meet their needs and expectations.

Legislation and innovation

Andrew Cruttenden, general manager, Trainline Partner Solutions

The French government made headlines earlier this year when it banned some short-haul domestic flights – a signal of intent which other governments will be watching closely and may follow. Rail’s clear sustainability advantage over air and road will become increasingly important. But to ensure business travellers can make lower carbon travel a priority, private sector innovation to improve access to rail content is also vital. Across Europe there’s a wave of liberalisation, with new carriers taking on state incumbents, and now extensive talk of competition for Eurostar too. This competition is driving up standards and driving down prices, making rail more attractive and helping reduce carbon emissions from travel. This trend will continue, making it increasingly important for retailers to improve access to rail content and provide business travellers with a seamless digital experience.

Training on track

Emma Gregory, director, Urbanberry Recruitment

2024 is set to continue to be a year of growth for many TMCs and we’re excited to support that. We hope to see the continuation of more training academies that some companies have introduced again in 2023, welcoming non-travel staff into the sector. It’s important these are properly managed with graduates given thorough support once “live”. Staffing levels are definitely more stable than the last 18 months but many job seekers are quick to mention that some employers are failing to replace experienced leavers, instead merging their responsibilities and increasing pressure on existing teams. We’ve noticed a decline in consideration of transferable skills – interesting considering that two years ago the industry was shouting from the rooftops about our own transferable skills to other sectors. Let’s hope in 2024 more companies can start to recognise people for their potential, not just exact experience.

Emissions standards

Christoph Carnier, president, VDR

With regard to the past year, we can certainly speak of a recovery in the business travel market, but not in all countries equally. We also remain exposed to geopolitical tensions, which will continue to have an impact on the business travel industry. This is unlikely to change in 2024. The topic of sustainability will remain and, above all, the identification of global reporting standards – for example, for hotels – in order to create reports and thus manage the carbon footprint. Travel technology has also become increasingly important in recent years. New and diverse distribution channels and the associated opportunities for customised offers are contributing to this. In addition, the topic of AI will have a massive impact on travel technology over the next two years. It remains challenging and professional travel management is required to understand the market.

Technology’s key role

Arlene Coyle, senior vice president, commercial, Amadeus Cytric Solutions

Sustainable travel programmes will continue to be top of mind in 2024 but our recent research showed a third of large companies don’t have a sustainable travel policy in place. Transparency, clarity and specific objectives that count with C-level buy-in are much needed. Technologies that help to accelerate the development of Sustainable Aviation Fuel and remove CO2 from the atmosphere will need investment to help the industry meet its targets. The technology used by corporate travellers to book their trips can also have a major impact on the total CO2 emissions linked to business travel. As a first step, carbon emission reporting, allowing the company to measure its impact, is already improving. But there is still so much more that can be done to steer travellers towards more environmentally friendly alternatives.

Content consternation

Scott Davies, chief executive officer, Institute of Travel Management

What came through loud and clear in ITM’s 2024 Buyer Priorities Survey is that the biggest challenge facing travel managers will be access to full content, and reliance on OBTs to deliver and fulfil that content, to ensure programme compliance. In fact ‘OBT optimisation’ is the top priority in 2024 for the second year running. Buyers tell us that, in general, booking tool technology needs to support their programmes better in terms of user experience, content and guiding more sustainable travel options. Our first ever survey of supplier members also revealed that they are facing multiple challenges over the next 12 months including rising costs and ongoing talent shortages. But on a positive note, suppliers are investing heavily in the corporate travel sector – 71 per cent have increased their investment year on year.

Time for AI to take off

Scott Wylie, chief technology officer, TripStax

Investment in Generative AI, which allows computers to engage with humans in natural language, is going to really take off in 2024. This is the first year that many companies are carving out a specific line in their budgets for AI development. Yet although generative AI is developing fast, it still has a long way to go before it can routinely handle most travel bookings and traveller servicing. I predict it will be 2025 before we see truly meaningful business travel AI products. We will also hear a lot more about carbon removal as opposed to carbon offsetting in 2024. Developments in how carbon dioxide can be removed from the air and stored safely will be a fundamental focus. In my view, carbon removal is much more impactful than planting trees or promoting sustainable aviation fuel and I would like to see a shift towards investment in it in 2024.