Business travel expectations are normalizing. In line with other travel indicators softening and consistent with prior quarters, eight in 10 business travelers expect to travel to attend conferences, conventions or trade shows in the next six months.
- While still trailing group travel demand, travel intentions for transient business travel to visit customers, suppliers or other stakeholders experienced a slight uptick from 74% in Q1 to 78% in Q2.
- Smaller sized companies and remote workers are driving more business travel demand than larger companies or business travelers working fully onsite.
In the short term, business travel spending expectations are also improving.
- An increasing share of corporate executives expect the same or more business spending over the next six months. Nearly four in 10 corporate executives expect business travel spending to be on par or greater than last year for all types—up from less than three in 10 in Q1.
Barriers to business travel: While cost constraints remain the top barrier to business travel, travel hassles are having an increasingly negative impact while cost concerns fall.
By the numbers: Nearly six in 10 (57%) corporate executives cited cost controls as a barrier restricting upcoming business travel, down from 71% in Q1. Additionally, corporate policies controlling costs and restricting business travel are on the decline.
- Business travelers employed by larger companies are more likely to cite cost constraints as a barrier to attend events than travelers employed by smaller companies.
- Down from 36% in Q1, one-quarter of business travelers cited cost or budget constraints as their top barrier to business travel.
While cost constraints are on the decline, other barriers including travel hassles remain.
One-quarter of business travelers reported avoiding or cancelling business trips in the past year for a reason other than cost.
- The overall time it took to travel is the most cited reason (36%) for avoiding business trips by air, followed by the possibility of flight delay and cancelation (24%)—similar to Q1.
Business travel continues to be viewed as essential.
- Consistent with prior quarters, nearly eight in 10 executives (79%) agree that business travel is essential to company operations.
Still, nearly half of companies have policies in place restricting business travel (47%).
- Similar to Q1, the top policy in place remains stricter evaluation of why and who travels for business.
In addition to stricter evaluation, the effectiveness of each business trip is a deciding factor when authorizing or committing to business travel.
- The ability to meet with multiple clients and customers whether when visiting customers, suppliers or other stakeholders or attending an event such as a conference or trade show is the top motivating factor to authorize business travel or to commit to a business trip.
What else: The ability to meet with multiple clients at once as well as introducing a new product/service are of higher importance to larger companies than smaller companies.
- Critical client relationships and closing deals are more important factors to smaller firms when authorizing trips.
Hybrid work arrangements are increasingly common. A growing share of corporate executives (53%) are reporting the majority of employees in their companies have hybrid work arrangements compared to 39% in 2022 Q2, as fewer employees are working fully at home or in the office.
As a result of flexible work arrangements, blended travel creates new opportunities.
- Consistent with Q1, in the past six months, half of business travelers working remotely extended a business trip for leisure and 26% traveled to work remotely from a different location.
- A supportive company culture/policy is the key factor for business travelers to work remotely in a new destination while partially covered costs and exploring a new destination are the top factors to extend a business trip for leisure.
- Corporate executives were more likely to be supportive of flexible work arrangements for employees to work from alternative destinations (77%) than to extend a business trip for leisure purposes (51%).
What’s ahead: Business travel conditions remained largely resilient in the first half of 2023 and demand is expected to continue to grow into Q3. Yet, rising economic headwinds will likely result in more challenging conditions and slowing business activity towards the end of the year.