Prices continue rising for business travel: Tactics for employers to control costs

As COVID restrictions continue to ease, business travel is increasing. Unfortunately, it’s also being impacted by the current economic climate – and you should expect prices to keep rising for the remainder of the year and the beginning of 2023.

That’s according to the 2023 Global Business Travel Forecast from CWT and the Global Business Travel Association. The new analysis gives a current picture of the business travel landscape, and it also has vital pricing info for execs looking at their travel budgets for next year.

The news isn’t promising right now. When looking at airfares for business travel, prices are expected to be 48.5% higher than pre-pandemic levels this year. They’re also projected to rise in 2023 – though the increase is projected to be more modest at 8.4%.  

This all adds up to an average ticket price of $646 in 2022 and $700 in 2023.

Hotel costs aren’t looking much better. Prices are expected to rise 18.5% this year and an additional 8.2% in 2023. Average room rates are currently $147 per night, and they’re projected to be $159 a night by next year.

The cost of car rentals is also expected to increase, though a bit less dramatically. Prices will rise 7.3% in 2022, and 6.8% in 2023. This’ll make the average rate for a vehicle $44 per day this year and $47 per day next year.

Add in the higher costs of food for your employees while they travel, and you may have to reconsider the number of trips your people take or make more room in the budget for business travel next year.

Keys to saving money on business travel

If those changes aren’t feasible for your company, the travel forecast suggests some cost-saving strategies employers can try when booking future business travel, such as:

• Plan trips farther in advance. The earlier you and your people book business trips, the more likely it is that flights and hotels will be available at a reasonable cost. You may also want to consider using travel apps or agencies that allow you to book travel and accommodations at the same time at a package rate. Another tactic to save costs when booking early is to ask for nonrefundable hotel rate options. These are often cheaper than standard bookings.
• Build in travel flexibility. If a departing flight Is canceled last minute, you may also have to cancel an employee’s entire trip and lose out on nonrefundable deposits and fees. That’s why it’s key to explore different options for travel and have them ready as an alternative, just in case. Perhaps an employee could travel by train or car, if necessary. You also may want to consider more flexible arrival and departure dates – especially if this saves money on the trip.
• Leverage loyalty with vendors and suppliers. Limit your preferred travel vendors and work with them exclusively to plan your business travel. Also, encourage employees to sign up for their loyalty programs. Forming these partnerships and being loyal can pay off with benefits like exclusive discounts and preferred booking for trips.