Business travel’s rebound is being hit by a slowing economy
Business travel came back this year more strongly than most industry analysts had predicted in the depths of the pandemic, with domestic travel rebounding by this fall to about two-thirds of the 2019 level. But in recent weeks, it appears to have hit a new hurdle — companies tightening their spending in a slowing economy. Henry Harteveldt, a travel industry analyst for Atmosphere Research, said that corporate travel managers have told him in the last few weeks that companies have started to ban nonessential business travel and increase the number of executives needed to approve employee trips. He said he was now predicting that corporate travel would soften slightly for the rest of the year and probably remain tepid into the first quarter of 2023. Harteveldt also said his conversations led him to believe that business travel would “come in below the levels airline executives discussed in their third-quarter earnings calls.” Airlines were bullish on those earnings calls, a little over a month ago. Delta, for one, said 90% of its corporate accounts “expect their travel to stay the same or increase” in the fourth quarter. United Airlines, too, said its strong Q3 results suggested “durable trends for air travel demand that are more than fully offsetting any economic headwinds.” The change in mood has come as the economy has more visibly slowed. Technology companies, in particular, have been announcing significant layoffs. Housing lenders have also been reducing staff, as rising mortgage rates cut into their business. The travel industry has long relied on business travel for both its consistency and profitability, with companies often willing to spend more than leisure travelers. When the pandemic almost completely halted business travel in 2020, people were forced to meet via teleconference, and many analysts predicted that the industry would never fully recover. But business travel did come back. As the economy reopened, companies realized that in-person meetings serve a purpose. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-11-28/general/business-travel2019s-rebound-is-being-hit-by-a-slowing-economy
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Business travel’s rebound is being hit by a slowing economy
Business travel came back this year more strongly than most industry analysts had predicted in the depths of the pandemic, with domestic travel rebounding by this fall to about two-thirds of the 2019 level. But in recent weeks, it appears to have hit a new hurdle — companies tightening their spending in a slowing economy. Henry Harteveldt, a travel industry analyst for Atmosphere Research, said that corporate travel managers have told him in the last few weeks that companies have started to ban nonessential business travel and increase the number of executives needed to approve employee trips. He said he was now predicting that corporate travel would soften slightly for the rest of the year and probably remain tepid into the first quarter of 2023. Harteveldt also said his conversations led him to believe that business travel would “come in below the levels airline executives discussed in their third-quarter earnings calls.” Airlines were bullish on those earnings calls, a little over a month ago. Delta, for one, said 90% of its corporate accounts “expect their travel to stay the same or increase” in the fourth quarter. United Airlines, too, said its strong Q3 results suggested “durable trends for air travel demand that are more than fully offsetting any economic headwinds.” The change in mood has come as the economy has more visibly slowed. Technology companies, in particular, have been announcing significant layoffs. Housing lenders have also been reducing staff, as rising mortgage rates cut into their business. The travel industry has long relied on business travel for both its consistency and profitability, with companies often willing to spend more than leisure travelers. When the pandemic almost completely halted business travel in 2020, people were forced to meet via teleconference, and many analysts predicted that the industry would never fully recover. But business travel did come back. As the economy reopened, companies realized that in-person meetings serve a purpose. Story has more.<br/>
