Corporate Travel Trends: Prices Stabilize as Demand Holds Strong
Corporate travel showed remarkable resilience in the third quarter of 2024, with global demand reaching its peak and poised for further growth into 2025, according to FCM Consulting’s latest Global Quarterly Trend Report. This sustained demand is prompting airlines to expand capacity, even as some travel costs show signs of stabilization.
Airfare Trends: Economy Prices Dip While Business Class Rises
The report highlights notable shifts in airfare pricing:
- Economy Class: The average booked fare across 380 city pairs globally dropped to $507 through August 2024, marking a $16 decline from the same period in 2023.
- Business Class: In contrast, business class fares saw a 6% increase, translating to an additional $137 year over year.
Despite these pricing trends, the global load factor hit a record 86.2% in August, signaling strong passenger demand. Looking ahead, FCM forecasts a 1.8% increase in air capacity for the first half of 2025, driven by the corporate sector’s continued reliance on air travel for business growth.
Ashley Gutermuth of FCM Consulting noted, “It’s an exciting time for business travel. Airlines are seeing record-setting load factors, and the slight dip in economy airfare is a promising sign for corporate travelers focused on leveraging air travel for business success.”
Hotel Rates: Regional Differences Persist
Corporate hotel rates showed mixed trends across major regions in the third quarter:
- Europe: Average daily rates increased by $10, reaching $209.
- North America: Rates rose by $17, averaging $267.
- Asia: In contrast, rates fell $6 year over year to $166.
Looking ahead to 2025, FCM predicts a 2% to 4% increase in global average corporate daily rates, even as inflation cools. Rising operational costs and sustained demand are expected to drive these modest increases.
Car Rental Rates See a Steep Decline
One surprising development was the significant drop in corporate car rental rates. The global average rate booked by FCM clients fell by 30% year over year, settling at $52 in the third quarter.
Outlook for 2025
As business travel demand continues to grow, airlines, hotels, and other travel providers are adjusting to meet corporate needs. With increased air capacity, stabilizing economy fares, and regional variations in hotel rates, the corporate travel landscape is evolving to balance cost and convenience.
For corporate travelers, these trends provide a mixed bag of opportunities and challenges, but the continued demand for air travel highlights its critical role in driving business growth.
