Corporate Traveller has released the results of its global State of the Market report, which reveals that corporate travel budgets are expected to drop by 18% globally in 2021. The overall future demand for travel after the COVID-19 pandemic will also be weaker with 31% of corporations foreseeing a decrease in travel budgets.
The State of the Market report, which forms part of Corporate’s Travellers commitment to guide clients out of the COVID-19 crisis and onto the road to recovery, shows that half of customers (50%) have reignited their travel programme to some extent since August 2020.
Especially domestic business travel has shown promise with the vast majority of businesses (90%) planning to travel domestically and regionally in the months ahead. Long-haul international travel might take longer to recover, with no strong indication of when business will return to ‘normal’. The average number of trips is also expected to drop from an average of 6-8 trips to 3-4 trips annually.
An indication of the patchy return to travel can be observed in airline schedules and seat capacity. Globally, airline seats have risen and fallen week to week in what has been a very volatile process as airlines try to decipher the demand, traveller confidence and future government restrictions. Going forward, affordability of flights combined with traveller confidence and discretionary budget to spend on flights will be determining factors when it comes to airline recovery.
Hotel rates globally are expected to drop by 4,5% while in Africa we can foresee a drop of 3% in hotel rates. This has, for the first time in 10 years, created a buyers’ market with hotels offering a combination of fixed negotiated rates and dynamic discount rates.
Despite the temporary drop in hotel rates, companies are anticipating travel costs to rise incrementally as suppliers such as airlines and hotels try to recover losses incurred during 2020. It’s therefore not surprising that travel managers rank travel budgets as their second priority for the future after traveller safety.
Travel budgets remain tight for most companies for the foreseeable future. A guide with handy tips on how to curb travel leakage and make intelligent savings on your corporate travel without impacting on the comfort of the traveller was released to help companies navigate budget restraints.
Even during these difficult economic times, Corporate Traveller understands the importance for customers to work with Level 1 B-BBEE providers. “We are very proud to say that Corporate Traveller once again achieved a Level 1 rating in 2020. Not only does a B-BBEE certificate help our clients achieve their procurement goals, it is also a representation of our ongoing commitment to transformation,” says Oz Desai, GM Corporate Traveller.
What’s more, traveller readiness is another important factor to consider. While employees might be able to navigate the meeting or board room with confidence, taking to the road or the skies during COVID-19 can create trepidation in even the most organised of travellers. That is why Corporate Traveller has put together a comprehensive toolkit that will allow companies to gauge traveller confidence and help them be prepared for travel in COVID-19 times.
Although the road to recovery for business travel remains largely unpredictable, Desai says Corporate Traveller is cautiously optimistic for the months and years ahead. “Business travel is a critical component of success for many industry sectors and we expect a gradual return to corporate travel in our market. As our borders reopen, businesses will need to navigate their way to recovery and position themselves to be ready for the next step. That’s where our consultative approach comes in. At Corporate Traveller, we have made a solemn pledge to help companies maximise and control their travel budget for the years to come,” he concludes.