The corporate travel industry is forecast to recover to 75 percent of pre-Covid transactions by the end of 2022, according to the latest update from Advantage Travel Partnership.
London-based Advantage, which is the second largest TMC network in Europe, said that its forecasts showed that bookings this year would be up by 83 per cent on 2021, although still 25 per cent lower than in 2019.
The figures were revealed in Advantage’s latest Global Business Travel Review 3.0 report, which has been compiled in collaboration with data specialist Travelogix.
The report also showed that average transaction value was up by 12.4 per cent this year to £333.32 compared to the last pre-pandemic year when it was £296.50. Transaction value had slumped to an average of just £106.12 in 2020 and £145.11 in 2021 as the pandemic kept most business travelers at home.
Guy Snelgar, global business travel director of the Advantage Travel Partnership, said the last six months had been a “story of recovery and growth”, despite many parts of the industry facing well-publicized disruption and capacity constraints.
Advantage said booking patterns had been “quite stable” since early summer after seeing significant volatility in the spring. Although the consortium added that there has yet to be a “return to traditional seasonality” for corporate travel.
Another trend is for travelers to take longer trips, with the average duration rising to 6.7 days compared with just 4.6 days in 2022, which Advantage said reflected corporates’ desire to make travel “more purposeful” post-Covid.
There has been more normalization in booking horizons with the average lead time between booking and traveling up to 21.1 days in 2022. Although this figure remains behind the 2019 average of 23.4 days, it is still a doubling of the average lead time of just 9.8 days last year.
Advantage expects the trend of lengthening lead times to continue next year and should reach or even exceed the 2019 average by the end of the first quarter of 2023.
“Looking at the business travel industry over the last six months it has been a story of recovery and growth, despite considerable ongoing disruption and capacity challenges,” added Snelgar.
“While we are confident that travel demand will yield great volumes in 2023, an increase in airline capacity and scheduling will be key to the recovery of pre-pandemic numbers. With that in mind, we maintain our original forecast of full recovery to 2019 figures for a full 12-month period in April 2024-March 2025.”
Refunds have continued to be “an issue” for TMCs in 2022, particularly with so much disruption to airline schedules during the summer.
Advantage said one in 86 bookings were being refunded in the third quarter, compared with one in 49 bookings in the first three months of the year. Fortunately this situation seems to be “settling” with October’s refunds seeing a “massive decrease” for TMCs.
“We put this down to the huge reduction in capacity and availability in the sense that travelers are, overall, having to stick with the bookings they have if they want to travel,” said the report.
Chris Lewis, founder and CEO of Travelogix, summed up: “While the summer demonstrated no real clear signs of standard seasonality, there were glimmers of a recovering industry that we cannot ignore, even when factoring in the UK’s economic woes, geopolitical unrest and, of course, the capacity and scheduling restrictions we are seeing in the aviation space.
“As an industry, we are around 25 percent away from reaching the transaction volumes we saw back in 2019, which shows just how far we have come.”