The Trends Shaping a Business Travel Power Shift

The travel industry has always navigated fluctuations in the economy, but 2024 is a bit different. The current economic environment and other pressures—including New Distribution Capability (NDC) adoption—are compounding to drive power shifts in the industry that will force changes for travel management companies (TMCs), their customers, and more.

Here’s what we’re seeing.

Increasing Business Travel

First, the industry is experiencing an uptick in business travel interest to help drive growth for companies in 2024. A recent Global Business Travel Association (GBTA) poll found that 59% of travel managers expect an increase in business trips at their company in 2024 compared to 2023. Also, 100% of finance leaders say their organization is investing for growth this year, including some 57% that are investing heavily, according to the second SAP Concur CFO Insights report.

After a multi-year period of challenges and uncertainty, demand for travel -- which is key for business deals and relationship management—will continue to surge as companies aspire to grow and deliver stakeholders value.

Increasing Travel Costs

Second, although reports suggest that airfares are slightly lower in 2024 compared to this time of year in 2023, lodging, dining, and entertainment costs continue to increase year over year. Additionally, airfare cost 10% more and gas cost 37% more, on average, in 2023 compared to 2019 based on SAP Concur data.

Two-thirds of travel managers (67%) expect an increase in their company’s travel spend this year, according to GBTA—a reasonable expectation based on what we’ve observed, as growing demand for business travel is likely to contribute to higher costs in the year ahead.

Increasing Alternatives

Third, we must acknowledge the notable content disparities that exist and continue to grow among legacy distribution channels, supplier sites, and APIs mostly due to NDC. In fact, 38% of global travel managers listed travel industry suppliers changing how they sell and book among the biggest threats to their company’s business travel, according to the 2023 SAP Concur Global Business Travel Survey.

In addition, business travelers are embracing the more flexible aspects of today’s employee experience, with an impact on how they prefer to book and manage their travel. Forty-nine percent of global business travelers said they typically use online travel sites, and 46% go directly to an airline, hotel, or car rental company website or mobile app to book business travel.

Growing disparities and changing expectations are forcing travel managers to adjust company travel policies to accommodate alternative ways of booking. In 2023, SAP Concur found that 38% of travel managers expected their policies to change to accommodate travelers’ need for flexible options, like booking directly with suppliers. Thus, making it essential that travel managers utilize existing technology to continue to obtain their corporate negotiated rates, administer policy and uphold their duty of care even with travel bookings that are made outside of the booking tool.

What’s to Come

Ultimately, we anticipate that these trends will transfer leverage from TMCs and customers to the suppliers on which they rely. I recently wrote about how this changing landscape is likely to impact TMCs through increasing consolidation in 2024; you can read the article on Business Travel News (BTN).

As NDC furthers the trend originated by the Low Cost Carriers, of booking travel directly with suppliers, travel managers and the TMCs they work with will need to find ways to adapt. This may include using a solution like Concur TripLink for increased visibility and control or the Select Access feature within Concur Travel for access to additional supplier content.

Although the travel industry may be used to fluctuations, complacency should be avoided at all costs. The industry will need to make changes and pivot quickly to satisfy customers, be ready for anything, and thrive.