Corporate spending in the sector isn't expected to hit 2019 levels until 2027
The classic business-class road warrior has been keeping it in park. Though corporate business travel is expecting to surpass pre-COVID-19-levels on a nominal basis this year, the Financial Times reports that the Global Business Travel Association doesn’t expect inflation-adjusted spending to hit 2019 levels again until 2027.
Suzanne Neufang, the group’s CEO, told the newspaper that “inflationary pressures and other things means [travel companies] are making more money on fewer trips” and that “the way companies travel is different,” resulting in “a new normal and that is probably here to stay.”
The consulting firm Deloitte recently explained what that new normal looks like: Fewer travelers doing more of the traveling. Southwest Airlines (LUV), which just started giving its customers assigned seats for the first time recently, said that trying to curry favor with business travelers was part of the rationale for doing so.
“Customers are just taking fewer short-haul trips today, they are flying longer,” said CEO Bob Jordan. “And when they fly longer, the importance of an assigned seat goes up. We’ve talked a lot about our desire and initiatives to grow market share with corporate business travelers in the managed business space, and their preference is for an assigned versus an open seat.”
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