We are now well into the third quarter of 2024, and the business travel industry is poised for considerable growth. As I travel around the country and internationally, I have noticed an uptick in people traveling for business in most airports that I have frequented.
NB: This is an article from DerbySoft
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We all thought there would be a decline in business travel due to the introduction of several remote communication platforms that we adopted during the pandemic, but this didn’t happen. When it comes to business, basic communication, information exchange, and online calls and emails will work. For all other business interactions beyond the basics, in-person meetings serve more value.
When it comes to the data, a GBTA study forecasts business travel expenditure could exceed $1 trillion by 2024 and potentially surpass that figure by 2027. No longer just a minor fraction of the whole, business travel now represents the most rapidly growing segment of the global tourism industry. Estimates suggest that by 2030, the international business travel industry could rocket to an impressive $2.97 trillion, a substantial increase from the $711 billion recorded in 2021.
A recent Deloitte report points to the resurgence of live events and the relaxation of travel restrictions as the leading catalysts for the projected sustained rise in business travel. Currently, the average business traveler embarks on nine business trips each year. Notably, these trips can range from a brief, two-day stint to an extended assignment of up to 28 days. The trend of combining business trips with leisure activities, often called “bleisure travel”, has gained impressive traction recently. This surge in popularity shows no signs of slowing down any time soon.
According to Allied Market Research, the worldwide bleisure market boasted a significant value of $315.3 billion in 2022. Over the next ten years, it’s slated to more than double, crossing the $731.4 billion mark by 2032. This trend suggests an annual compounded growth rate of 8.9%.
The macro trends of globalization and the burgeoning growth of emerging markets, particularly those in rapidly developing economies like China and India, are largely fueling the trajectory of business travel. For organizations expanding their international operations, meeting in person and establishing a local foothold in markets are key to their success strategy.
So, what other elements are igniting this demand surge? Amid so many claims over the last few years that virtual meetings are poised to replace in-person business engagements, what’s driving this flurry of business travel?
Let’s delve into what’s truly accelerating the wave and how it will impact hoteliers in the short and long term.
How has the business travel industry evolved from 2020 to 2024?
As per a Skift report, business trips are becoming more goal-oriented, with detailed planning to ensure optimal value. Business travel that contributes directly to revenue growth, such as finalizing deals or contracts, is receiving more favorable consideration. The focus also shifts towards environmental sustainability in the sector. To limit their carbon emissions, corporates showed a preference to green travel options, thus escalating demand for eco-friendly hotels and sustainable travel solutions. Notably, an astounding 88% of business leaders stated they are inclined towards hotels explicitly about their sustainability efforts.
A demographic transformation was also noticeable as more young professionals became frequent flyers. For this new generation workforce, business travel is a benefit, not a chore. A Forbes article reveals that 65% of young professionals see it as a status marker.
Predictions suggest a strong resurgence of business travel this year. A Global Business Travel Association (GBTA) study anticipates about a 21% boom. Some other insights from the report
- Business travel in the United States is expected to increase by 25%, thanks to a healthy economy, a preference for in-person meetings, and the rise of remote work.
- In Europe, business travel is predicted to grow as a result of economic recovery, expansion of international businesses, and the increasing trend of remote work and ‘digital nomadism’.
- Business travel in the Middle East and Africa is set to grow by 15%, fostered by improved economies, business expansion, and a rising middle-class ‘business travel’ culture.
What strategies are hotels implementing to attract business travelers?
Hotels are adapting to the rise of business travel by updating their services to cater to business travelers. One key tactic is to offer flexible booking options, considering that business travelers often have changing schedules. Hotels with easy reservation changes, late arrivals, and straightforward cancellations are the preferred choice for these travelers. We are also seeing more travelers combining business and leisure, known as ‘bleisure.’ – extending their business trips and using their downtime to explore local sights and activities.
By 2024, 75% of business travelers anticipate hotels will offer flexible cancellation policies. Moreover, rewards programs offering perks like free Wi-Fi, upgraded rooms, and access to business facilities are appealing to business-based guests. Hotel bookings using reward systems by business travelers are expected to grow by 10% in 2024.
Hotels are also attracting business guests with amenities tailored to their needs. These include fast internet, work areas in rooms, business centers, and meeting spaces. Some hotels even offer tech devices such as iPads or smart TVs to improve guests’ work efficiency.
Frictionless service is also crucial for hotels catering to business travelers. Understanding the importance of convenience and speed for these guests, hotels offer personalized service, quick check-ins/check-outs, and 24/7 concierge services. They also use technology solutions like mobile apps for room service or check-in and AI chatbots to answer customer questions.
Location is important for hotels serving business guests. They commonly pick locations in or near business centers or transport hubs. Partnerships with local businesses can benefit guests with discounts and special offers, enhancing their travel experience.
Understanding that business travel can be stressful, hotels are increasing their emphasis on wellness. They offer facilities like fitness centers, spas, healthy dining options, and even mindfulness or yoga sessions. These wellness services play a significant role in attracting business travelers who want to balance work and well-being.
Lastly, modern business travelers place high importance on sustainability, with a preference for properties and brands that align with their personal values, offering such as energy efficiency, waste management, or contributions to local communities.
