- Business travel spending will take two years longer than previously forecast to recover to 2019 levels.
- Labor shortages, inflation and supply chain issues are among the challenges.
Business travel spending might not recover to pre-pandemic levels until sometime in 2026 — two years later than previously expected — as inflation, labor shortages and geopolitical issues slow the sector's rebound, according to a new industry forecast.
Spending by business travelers, a key source of revenue for airlines and hotels, some of the hardest-hit industries in the pandemic, has been on the upswing this year. Spending worldwide is set to rise nearly 34% in 2022 to $933 billion, according to the Global Business Travel Association's annual report and forecast, published Monday.
That's still far short of the more than $1.4 trillion in business travel generated in 2019, before the Covid pandemic. One reason is that high inflation is driving up travel costs, which the industry group last week said would continue to climb through 2023.
For example, this year through July, revenue per available room in U.S. hotels was $92.36, up from $88.05 over the same period of 2019, according to preliminary data from hotel data firm STR. Occupancy was 63%, down from nearly 67% in 2019.
The report forecast a 42% increase in business travel spending in the U.S. this year from 2021, to nearly $213.4 billion. U.S. airline and hotel executives have touted a return of business travelers this year after many companies put trips on hold during the pandemic.