Live events driving recovery of business travel: Deloitte

i By April 19, 2023 No Comments

Live events will be the main driver of the ongoing recovery of the business travel sector in 2023, according to a new report from Deloitte.

The third edition of professional services firm’s corporate travel study, “Navigating Toward a New Normal,” examines why and when employees are expected to travel for business, as well as the dynamics creating headwinds and opportunity for the sector. It is based on a survey of 334 U.S.-based and European executives with travel budget oversight, fielded between February 7 and February 23, 2023.

This year’s edition revealed that live events are set to comprise a significant share of corporate travel, advancing live events from the fifth biggest driver of increased spend in 2022 to the top spot.  More than half of travel managers in both the U.S. and Europe expect industry events to spur travel growth this year.

The study also shows that with live events in mind,  companies are adjusting their internal plans.  Half report splitting larger gatherings into smaller, regional, virtually connected events, and 44 percent have adopted a hybrid approach. Further, 42 percent of those surveyed in the U.S. and 54 percent in Europe plan to integrate more clients into internal events.

“As business travel continues its climb, higher airfare and hotel costs are likely slowing the increase in trips taken,” said Eileen Crowley, vice-chair, Deloitte & Touche LLP and U.S. transportation, hospitality and services attest leader. “As business leaders take a strategic view of their travel plans and the industry adapts to a new normal, live conferences and events in particular are proving they can offer effective opportunities to connect in person, especially as remote and hybrid work remain fixtures of the corporate world.”

Other key findings in the report are:

  • Corporate travel spend in the United States and Europe is projected to surpass half of 2019 levels in the first half of 2023 and rise to two-thirds by the end of the year. Full recovery following the pandemic appears likely by late 2024 or early 2025.
  • International trips will account for a larger portion of the recovery this year. The international share of travel costs for U.S. companies is expected to rise from 21 percent in 2022 to 33 percent in 2023. The top reason reported for international trips involves connecting with clients and prospects. In the United States, the main drivers are to connect with global industry colleagues at conferences and to build client relationships. In Europe, client project work, followed by sales meetings are the biggest reasons for trips beyond the continent.
  • Travel buyers are renegotiating contracts with suppliers and balancing lower expected trip volumes with higher rates for hotel rooms and airfare.
  • One-third of U.S. companies and four in 10 European companies say they need to reduce travel per employee by more than 20 percent to meet their 2030 sustainability targets.
  • A majority of companies surveyed (70 percent) strategically evaluate and weigh potential outcomes of business travel, such as revenue generation, alongside the side effects of cost, health risks and emissions.

According to Deloitte, while full recovery to 2019 levels appears possible by late 2024 or early 2025, accounting for inflation and lost gains would potentially leave the corporate travel market between 10% to 20% smaller than it was prior to the pandemic.

Read the full report HERE.