
Understanding the changing dynamics of corporate travel
By Dorothy Dowling, executive director at Horwath HTL, a strategic advisory firm for the HSMAI Foundation; Breffni Noone, associate professor at Pennsylvania State University, member of the HSMAI Foundation Board and the HSMAI Revenue Optimization Advisory Council.
Last month, HSMAI hosted its first Business Futures Forum, Understanding the changing dynamics of corporate travel, in San Antonio, Texas.
Industry experts shared insights on the evolving business travel landscape and outlined opportunities to capture a larger share of the corporate travel market.
Main conclusions:
1. Recovery of business travel
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- The projected value of business travel in 2024 is 1.48 trillion euros (4Q1,480 billion), an increase of more than 6% (3Q1,480 billion) compared to 2019 (GBP). The figure will reach 472 billion euros (+13.4% (3Q1,480 billion) compared to 2019; WTTC).
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- Group travel recovery: Group travel has returned to 2019 levels in RFP value and volume, with 8% growth in Q1 2Q3 compared to 2023.
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- Meeting the organizers' expectations: Organizers expect to spend more in 2025, with a preference for in-person meetings (60 in-person %, 20 virtual %, and 20 hybrid %).
2. Market segment opportunities
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- SME Market:
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- Small and medium-sized business accounts have grown by 30% in 2019 compared to 2019 levels, indicating substantial growth.
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- Competition for SMEs is intense, with OTAs and hotels competing directly.
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- SMEs often lack the resources and experience of large corporations, so partnerships with suppliers and technology are crucial to serving this market.
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- Hotels need to develop more comprehensive and user-friendly platforms that address needs such as booking and expense management, as well as offer specific strategies tailored to SMEs.
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- SME Market:
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- Workforce travel:
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- This segment includes labor equipment (e.g., construction, transportation, and logistics), with a global market size of $23 billion annually.
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- These trips occur mostly in tertiary markets, where hotels often operate below capacity, making them a valuable segment for increasing volume.
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- Loyalty programs are key: 95% of business travelers belong to at least one loyalty program, and 65% of business travelers belong to two or three programs, representing a significant opportunity to capture this segment.
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- Workforce travel:
3. Trends in corporate travel
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- Dual management: 90% of travel managers are involved in both finding hotels for employees and organizing meetings and events.
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- New actors: 65% of the organizations submitting group RFPs are new, many led by Millennials and Gen Z. These organizers are optimistic and willing to spend on travel.
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- Price preferences: Hotels prefer dynamic agreements and last room availability (NLRA), but corporate managers tend to prefer fixed pricing.
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- Long-term RFP: Some companies are reconsidering RFP cycles, opting for long-term agreements.
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- Focus on savings: Managers focus on reducing costs and incentivize employees to make more economical travel choices.
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- Changes in reservations: There's a shift toward OTAs instead of traditional TMCs, and platforms like Agoda are capturing bookings, making it difficult to track and manage corporate bookings.
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- Bleisure:
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- There has been a significant increase in travel combining business and leisure, quadrupling in 2024 compared to 2023.
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- Companies are formalizing policies to allow package travel, including features such as split payments and extended stays in their booking systems.
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- Bleisure:
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- Sustainability:
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- More and more companies are demanding stays at sustainable properties, requiring hotels to actively measure and report their sustainability efforts.
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- Sustainability:
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- Personalization:
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- Companies are looking for more personalized options tailored to their specific corporate travel needs.
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- Personalization:
Innovations such as AI-powered booking tools, continuous rate monitoring, and small meeting technology are emerging as key differentiators.