Expectations for a strong year are supported by data from the company’s vast customer portfolio and studies from across the industry. According to the Global Business Travel Association’s “Q1 2023 Business Travel Outlook Poll” published at the end of January, domestic and international bookings are currently at 67 per cent and 54 per cent of 2019 levels. This is up from 63 per cent and 50 per cent in their October survey.
Brighter days for business travel
According to Amex GBT, 78 per cent of travel managers expect more, or a lot more trips in 2023 versus 2022. Eight-six per cent of travel suppliers expect higher spending from corporate customers in 2023, an improvement from 80 per cent in October. Finance, insurance, professional services and consulting are the sectors showing the strongest growth rates.
This expected increase in demand will be met by increased supply supporting confidence in solid industry growth this year. IATA expects capacity growth of 18 per cent globally in 2023. This includes 5.5 per cent in North America, 6.1 per cent in Europe and 48 per cent in Asia Pacific, largely driven by China.
Small businesses leading the way
Amex GBT says that SME clients “were leading recovery” and it was benefiting from an “all-time high” in win rates and customer satisfaction in this segment of the market.
The company told investors that distributed teams and hybrid work models are creating new demand for business travel, meetings, and events; and that global travel spend is expected to grow as capacity increases and existing restrictions in various regions are softened or lifted.
Increased meeting bookings also boosted hotel revenue, particularly for groups of under 50 people. Amex GBT’s meetings and events division has more than recovered, compared with 2019, and those smaller meetings now represent its fastest growing area of business, said CEO
Amex GBT signed “$2.1 billion of SME new wins value” in 2022, with a quarter of that value coming from businesses whose travel programs were previously unmanaged or handled in-house. “Of course, our biggest growth opportunity is with SME customers,” said Abbott. “This represents a total opportunity of approximately $950 billion of travel spend. Within the SME segment, we are the #1 player in managed travel, but only 30 per cent of the $950 billion opportunity is actually managed today, providing a significant growth opportunity.”
While the recovery for business travel has been lagging behind the leisure sector in the aftermath of the pandemic, the company’s latest earnings report paints a more hopeful picture for 2023.
Feature image by Briana Tozour