After a significant hit to the tourism industry in 2020, corporate travel began to bounce back after a year and steadily rose in numbers by 2023. Travel resumed, business got going, and people of all kinds again took to the skies and went on business trips. The question is, though, how much has business travel recovered, and has it changed in the last few years?
Luckily, thanks to a study conducted by Passport Photo Online, we have all the latest business travel news, statistics, and trends. In this article, we will take a closer look at all the numbers behind business travel in 2023 and explore all the most intriguing facts about the reality of modern corporate travel. If your job requires a lot of traveling, or perhaps you’re just interested in this particular subject, you will find plenty of interesting insights.
Impact of the Pandemic
It will come as no surprise that 2020 was a time of significant cutbacks, and most businesses looked in horror as every chart they looked at was red rather than green. The first year of the pandemic was the harshest drop in business travel spending in the XXI century. It was a catastrophe for the travel industry, and to put things into perspective and give you an exact number, it was a fall of a whopping -54% in spending, and that’s just in the US.
Worldwide, we saw similar losses in the industry, with business travel shrinking from $1.5T to $700B.
By 2021, businesses cut 90% of travel expenditures because of ongoing travel restrictions to prevent the spread of the pandemic. What followed was that companies worldwide suspended all international travel to the point where only some were practicing it. 92% in total decided to play it safe and cut their losses.
The expenses of US companies on plane tickets significantly dropped compared to pre-Covid times.
- Amazon: $100B (-80% drop)
- Deloitte: $97B (-83% drop)
- FedEx: $96B (-36% drop)
- Apple: $95B (-68% drop)
- KPMG: $80B (-62% drop)
- Walt Disney: $80B (-50% drop)
According to many CEOs around the world, some of the most significant consequences of business travel cutbacks include:
- Plenty of short-term gains and long-term losses
- Poor financial performance
- Major difficulties in acquiring new customers
What’s also interesting is that even though, as time passed and restrictions were lifted one by one, the number of canceled flights in the US was even greater in 2022.
Post-pandemic Business Travel
As the COVID-19 pandemic got contained and under control, the travel industry generally began its rise from the ashes, with business trips expected to account for ~20% of all travel spending. The time has come to catch up and make up for a year of symbolic radio silence, and most employees are optimistic about the recovery process.
In 2022 alone, more than 4 in 10 employees (43%) declared that they were more likely to practice corporate travel again.
In 2023, the estimations tell us we should reach pre-pandemic expenditures next year. To be more precise, it should reach $336B in 2024, and it will only grow further shortly.
The expectations certainly are high, as while we’re on an upward trajectory and investing more and more in business travel, we should see an almost doubled (188%) increase in the business travel market by 2028 – $2T.
Business Travels in 2023
Considering how much the pandemic impacted our plans in previous years and how many trips got canceled and postponed, it is no surprise that any form of travel is appreciated nowadays, even business trips. According to the study, when asked about being sent on a corporate trip, practically every employee would consider it a nice perk.
In general, travel expenses sit comfortably at ~10% of the company’s total expenditures. It’s essentially a golden standard that should see plenty of business trips take place, both internationally and domestically.
There’s a lot of movement in the US alone, with roughly 400M trips occurring here annually and as many as 700K international business visitors arriving there.
As a result of many business trips in the US, as well as all the visitors arriving to talk business, we can clearly see how massive the business travel market is nowadays. From $120B expenditures back in 2020, we’re now experiencing a spectacular rise, with a 180% increase to $350B we should see in two years in 2025.
Typical Business Trips
Anyone who’s ever been on a business trip will no doubt tell you that they’re rigorously planned and don’t allow for much else beyond attending to business matters. The length of an average business trip nowadays is three days, and roughly every third employee is said to spend at least two weeks from home per month. Talk about being on the move, right?
Sales visits are the most common (43%), with various people traveling to close deals or promote products and services.
Leadership visits remain a prevalent reason for business travel (32%), with senior company members stepping away from their offices and visiting different worksites. They’re beneficial for building rapport and a sense of camaraderie within a company. The less anonymous different teams and branches are to each other, the better.
The third most common (31%) goal for a business trip involves working in person on a client’s project, while the last 15% is reserved for international conferences.
Interestingly, according to the study, only roughly ⅔ of companies reimburse their employees’ travel expenses back to the HQ. Moreover, if someone wishes to organize a less conventional lodging and goes for private rentals, they’re mostly on their own. Only 1 in 10 companies, it seems, will entertain such an idea instead of opting for a more traditional hotel room booking.
Your Typical Business Traveler
I’m confident that when you hear of someone going on a corporate trip, a particular portrait immediately comes to mind. A smart-looking suit or a lovely, professional dress, accompanied by a mandatory suitcase and small luggage with elegant alternative clothes in case the unthinkable happens and one outfit gets ruined.
When we look at modern business travelers, we first notice their age. You won’t see many younger businessmen or women, as the median age of such an individual is 44.
There is a certain disproportion for male and female corporate travelers, as we’re looking at a 70-30% ratio between men and women.
According to the study, they’re used to being on the move, and spending up to 6 days a month on the road is perfectly normal. More than half of the surveyed admitted to it.
However, the sad reality of their job is that most of them (64%) complained that while they’re away on a business trip, it’s all on them. If things go smoothly, everything’s fine, and life is fantastic, but once something goes wrong and previously laid plans go south, they’re alone, and there’s no one to help.
Moreover, because business trips often demand quite a lot from us, both physically and mentally, sometimes there’s just no time to regenerate correctly.
One of the issues mentioned by the surveyed Americans has to do with poor sleep quality or even being unable to rest at all. Alcohol use was also noted, with 30% of corporate travelers supposedly not shying away from percentages.
Key Statistics in 2023
The amount of money poured into the business travel market is, all things considered, only a natural turn of things. The vast majority of companies, larger ones with 1K+ employees, are all in agreement – funding business travel is essential today. What makes them say so?
- 69% of executives believe in its significant role in developing good customer relationships.
- 57% consider it crucial in their efforts to spread awareness.
- 45% think investing in business travel is vital to understand the newest trends and staying on top.
- 44% believe business travel’s most significant benefit is improving professional development.
- 38% of surveyed executives think corporate trips are essential in gaining and maintaining an edge over the competition.
- Last but not least, 27% believe that business travel allows them to close deals more effectively.
Most Popular Corporate Travel Destinations
The world is a prominent place, and the US is hardly the only country that sees plenty of business travelers come around. Indeed, it is the most common destination for business visitors, which is only proven by the immense amounts of money mentioned in previous sections.
Other notable destinations that see plenty of corporate trips include:
- United Kingdom
To put things into perspective and show just how much the US dominates in the business travel market, the statistics from 2021 alone paint a very telling picture. The total business travel spending in those four countries is still lower than the US’s $269B.
Wrap-Up: Business Travel
It is safe to say that the travel industry as a whole wanted to bounce back after massive losses during the pandemic, and now that they’ve weathered the storm, business travelers can go back to touring the world. Employees eagerly sign up for business trips despite their rather stressful nature.
The business tourism industry is on the verge of returning to normal, and we should see expenditures returning to the pre-pandemic levels within the next year, and what happens next? According to the estimations, things are looking up.
Featured image credit: Tomek Baginski
About the author
Michal Laszuk is a writer at PhotoAiD and an avid traveler with thousands of miles under his belt. Always eager to pick the most unconventional vacation destinations, he’ll go anywhere, provided there are enough hiking trails to admire.