Tuesday, July 16, 2024

Most buyers expect higher 2024 travel budgets

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Corporate travel managers expect their organisations’ 2024 travel budgets to grow by 6 per cent year over year, a figure slightly lower than that projected last October, according to a Morgan Stanley survey. 

The US-based bank this month surveyed 140 corporate travel managers from organisations around the world who collectively account for $5 billion in annual global travel spend. 

The respondents also projected 2025 travel budgets would increase on average 6.2 per cent year over year. 

In Morgan Stanley’s prior survey of travel managers, respondents on average projected an 8 per cent year-over-year increase in 2024 travel budgets. 

In this survey, respondents — all of whom have “primary or shared responsibility for managing corporate travel needs and negotiating with hotels,” according to Morgan Stanley — projected travel budgets in the first half of 2024 would increase 6.7 per cent year over year and 5.4 per cent in the second half. 

About 15 per cent said their budgets in the first half would decline, as did 11 per cent for the second half and 8 per cent for 2025. 

About 48 percent of respondents indicated their organisations’ travel budgets already had reached pre-pandemic levels, up from 40 per cent in the previous survey. However, about 25 per cent projected their budgets never would return to pre-Covid levels, up from 13 per cent in the October survey, which Morgan Stanley called “somewhat concerning.”

Still, respondents projected their organisations would book 8.7 per cent more hotel rooms on average in 2024 than 2023, and then 8.3 per cent more year over year in 2025. 

Morgan Stanley said these figures, along with the expectation for higher travel budgets, suggest that hotels’ general expectation for low-single-digit year-over-year gains in 2025 revenue per available room might be a bit light. 

About 12 per cent of respondents’ organisational travel volume in 2024 will be replaced by virtual meetings, they projected, a similar figure to the October 2023 survey and comparable to the share they project to replace in 2025.

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