Lighted tunnel at United Airlines terminal, O’Hare International Airport, Chicago Illinois.
Andrew Woodley | Universal Images Group via Getty Images
Business travel spending may 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 recovery, according to a new forecast by industry.
Spending by business travelers, a key source of revenue for airlines and hotels, some of the industries hardest hit by the pandemic, has been on the rise this year. Worldwide spending is set to grow nearly 34% in 2022 to $933 billion, according to the Global Business Travel Association’s annual report and forecast, released 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 rise until 2023.
For example, this year through July, revenue per available room in U.S. hotels was $92.36, up from $88.05 in the same period in 2019, according to preliminary data from hotel data firm STR. Occupancy was 63%, up from nearly 67% in 2019.
The report predicts a 42% increase in business travel spending in the US this year from 2021, to nearly $213.4 billion. US airline and hotel executives have warned of a return of business travelers this year after many companies suspended travel during the pandemic.