Wealthy holidaymakers are snapping up some of the business-class tickets that would usually be sold to corporates. Picture: 123RF/PRESCOTT09
“Demand is clearly outstripping supply,” said Nick Vournakis, executive vice-president at corporate travel management firm CWT. “At some point, corporates are going to say enough is enough.” With companies balking at the costs, corporate travel is back on shaky ground, having not yet recovered from virus-related lockdowns. That’s bad news for airlines. Business travellers represent 75% of a carrier’s profit but only 12% of passengers, according to travel software firm Trondent Development.
Boston-based consulting firm Refine and Focus, which works on projects across the globe, was wary of paying for unnecessary trips even before the pandemic. Rising air fares and an inflationary spike in expenses have grounded the whole company.“We have almost stopped travelling,” said Purnima Thakre, the firm’s co-head. “For any given project, I’d rather pay people better than spend that money on air tickets.
The shift coincides with rising inflation and fears of a recession. Any rebound to pre-pandemic corporate travel spending of $1.4-trillion won’t come until 2026, according to the Global Business Travel Association. That’s up to two years later than the association previously expected. Lendlease, a Sydney-based developer whose projects include the 9/11 Memorial & Museum in New York and Malaysia’s Petronas Twin Towers, said the cost of flying is making the company rethink business trips and apply lessons learnt during the pandemic.