After a milestone year for the industry in 2023, resulting in the busiest and least interrupted year for business travel in over four years, and with traveller confidence on the rise, FCM Consulting is predicting another big year for business travel in 2024.

The division of Flight Centre Travel Group says data suggests there will be even more trips booked in the year ahead, despite rising costs across the airline, hotel, and car rental market.

A key trend, based on data from FCM’s just-released Global Quarterly Trend Report for Q4-23, will be the expected rise in global air travel capacity that will surpass 2018 and 2019 levels. However, the report noted that while there is expected to be more seats (+3.5%), it will come with less flights (-5.6%) – as a result of fleet configuration changes and shifts in schedules.

Regionally, the forecast for North America is predicting that there will be 7% more seats and 7% less flights offered.

“It’s shaping up to be another big year for business travel with travellers eager to get back on the road and airlines expected to increase seat capacity, especially in North America,” says Ashley Gutermuth, Head of FCM Consulting, Americas. “And with the busy year ahead, it’s essential that travel managers prioritize communication in order to support their travellers and ensure they have a clear understanding of industry changes, which could also result in changes to policy.”

Increased travel costs

But despite the increased seat capacity, businesses will still have to potentially reset their budgets as travel costs are projected to increase across the industry by approximately 3%. Based on a price analysis of 380 different city pairs across the world, global economy airfares were up $76 (+17%) and business airfares were up $246 (+15%) in 2023, compared to 2019.

In North America, the city pair with the largest economy rate increase (33%) was JFK/New York – LAX/Los Angeles, while EWR/Newark – ORD/Chicago saw the largest rate decrease (24%). The city pair with the only business rate increase (11%) was JFK/New York – YYC/Calgary.

On the accommodation side, the average room rates (ARR) in North America increased to $250 (+$17) in 2023 versus 2022. Compared to the previous quarter, some of the largest rate increases during Q4-2023 included Mexico City (+37%), Los Angeles (+36%), and Chicago (+12%), while Vancouver (-32%) and New York (-22%) saw some of the largest rate decreases.

Overall, Q4-2023 saw just a 1% increase from Q3-2023, signalling a potential return to rate stability. Furthermore, occupancy levels, which were at 63% in 2023, also seem to have stabilized in North America as there was just 1% growth year-over-year.

The report also analyzed the car rental market and the global average daily rate (ADR) increased to $73 (+$20) in 2023 versus 2019. However, in comparison to the global level, the ADR for U.S. ($66) and Canada ($55) were each lower for the full year.

For to see the full FCM Consulting Global Quarterly Trend Report, visit HERE.

https://www.fcmtravel.com/en-us/resources/white-papers/business-travel-trends-and-forecasts-q4-2023