business travel 2023 outlook

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• Dec 21, 2022

2023 Outlook: Business Travel Bounces Back

Corporate travel budgets are recovering to pre-covid levels, our new survey finds. see where companies are spending in the year ahead..

After grinding to a near halt during the COVID-19 pandemic, business trips—and profits for hotels and airlines catering to higher-paying corporate clients—are bouncing back even beyond pre-pandemic levels, per a recent survey from Morgan Stanley Research.

Despite higher airfares and room rates, the survey of 100 global corporate travel managers found that many respondents believe their company's travel expenditures are already back to pre-pandemic levels and will continue to grow. The biggest demand is coming from small companies, which means lower-cost airlines may benefit the more than their bigger peers.

“Travel budgets are expected to see a noticeable improvement in 2022, with 2023 nearly back to ‘normal,’” says Ravi Shanker, an equity analyst covering North American transportation.  “Most interesting is that nearly half of the respondents expect 2023 budgets to increase versus 2019 overall. And of those that expect an increase in budgets, the majority believe 2023 budgets will be between 6% to 10% higher than 2019.”

Overall travel budgets show an improvement over previous surveys, with 2023 budgets expected to be 98% of 2019 levels on average.

Survey Highlights

•   Smaller companies lead demand for corporate travel. More than two-thirds (68%) of companies with under $1 billion in annual revenue expect travel budgets to increase next year, versus just 41% of companies with annual revenues over $16 billion. Similarly, 32% of smaller companies said travel budgets had returned to pre-pandemic levels compared with 23% of big firms. “This trend could likely favor low-cost carriers, as smaller enterprises tend to be more localized and require less long-haul travel,” says Shanker. “However, the legacy carriers with strong corporate exposure should see gains as well.”  

Nearly a quarter of both large and small companies say their firms are already back to pre-COVID travel levels, and 34% anticipate a full recovery by the end of 2023.

ESG Rate of Change

Holiday budgets hit by inflation, seeing a peak for food prices.

•   Airfares are higher, but that’s not a drag on bookings. On average, corporate airfares are expected to be about 9% higher than pre-pandemic prices. “Clearly the expected increase in corporate airfares is not having a major impact on corporate travel as passenger volume is expected to be basically flat versus 2019,” says Shanker.
• Room rates will continue to rise, though not as fast as they have recently. As of this October, market room rates had spiked 20% to 25% over 2019. Next year they will rise even more, though by an average of just 8%, say respondents (9% in the U.S. and U.K.; 5% to 6% in Latin America, Asia and Africa).
• Hotels face economic and competitive headwinds. While overall travel budgets are growing, companies are cutting costs by trading down when it comes to accommodations. (Historically, budget hotels outperform upscale lodging in tough economic times.) Alternative sources of accommodation also threaten traditional hotels, with 31% of respondents saying they intend to use short-term rental services in the next year.
• Virtual meetings aren’t going away.  Almost 18% of corporate travel will be replaced with virtual meetings, falling slightly to 17% in 2024, suggesting a degree of permanence in the shift with companies recognizing the benefits of virtual meetings ranging from cost savings to lower carbon footprints. Expect companies providing collaboration software to gain from this shift.

For more Morgan Stanley Research insights and analysis on global travel, ask your Morgan Stanley representative or Financial Advisor for the full reports, “Global Corporate Travel Survey: Snapping Back" (Nov. 8, 2022) and “Global Corporate Travel Survey: 2023 Travel Budgets Nearly Back to 2019 Levels, but ~20% of Meetings Could Still Shift to Virtual” (Nov. 8. 2022). Morgan Stanley Research clients can access the reports directly here and here . Plus more Ideas from Morgan Stanley’s thought leaders.

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After slow end to 2022, the business travel outlook is turning more positive for 2023

There is a growing sense that lower levels of business flying are here to stay, with many still expecting top executives to set corporate flying reduction targets, driven by cost savings, changing travel habits and sustainability needs.

Messaging regarding the recovery of the business travel segment remains mixed.

Since the onset of the COVID-19 pandemic, a number of the industry's leading voices have claimed that business travel will never fully recover due to changing working habits - namely, remote working and digital nomadism; company cost reduction; and a growing awareness of environmental issues.

Indeed, international business travel has been recovering at a much slower rate than leisure tourism.

• Recovery in business travel slowed in 2H2022, but a rapid recovery is expected for 2023.
• Confidence in business travel has nearly fully recovered to pre-pandemic levels.
• Suppliers are highly optimistic about the outlook for business travel, with expectations of increased spending by corporate customers.
• Customer meetings and new business prospects are expected to drive business travel investment.
• The recovery in US business travel spending has been driven by increased prices for airfares, car rentals, and accommodation.
• COVID-19 has brought changes to the demand for business travel, including hybrid and remote working arrangements, additional layers of corporate travel approvals, and sustainability considerations.
• Recovery in business travel slowed in 2H2022...but rapid recovery is expected for 2023.
• Confidence in business travel nearly fully recovered to the levels from before the COVID-19 pandemic.
• Suppliers are highly optimistic about the outlook for business travel; higher spend trend echoed by travel buyers and procurement professionals.
• Customer meetings and new business prospects to hold weight of business travel investment.
• A large part of the recovery in US business travel spending has been due to the growth of prices - such as for airfares, car rentals and accommodation.
• COVID-19 has produced a range of changes that have modified the landscape of demand for business travel globally.
• Hybrid and remote working arrangements have persisted for a large proportion of workforces globally.
• Additional layers of corporate travel approvals and duty of care arrangements introduced during the pandemic have proved stubborn to remove.
• Sustainability considerations are also weighing much more heavily on travel activity.

Recovery in business travel slowed in 2H2022...

The global recovery in business travel experienced a pause over much of 2H2022.

After a rapid bounce-back of business travel during 1H2022, the expectation had largely been that the sector would have a continued, if steady, recovery over the second half of the year. However, in the face of rising travel costs due to inflationary pressures, airline operational chaos across multiple regions, and wider concerns about the macroeconomic outlook - businesses revised their plans and travel and budgets were largely static.

This was clearly evident when listening to comments from some of the leading airlines in the US , where business travel recovery had been strong.

In early Dec-2022 United Airlines CEO Scott Kirby stated that business travel had "plateaued" in late 2022, adding that this was "indicative of pre-recessionary behaviour". Delta Air Lines President Glen Hauenstein reported at the start of Jan-2023 that corporate travel demand had been "steady" over 4Q2022, with domestic corporate sales recovering to 80% of 4Q2019 levels.

Alaska Airlines CEO Ben Minicucci reported that large Silicon Valley technology companies had largely "turned off" business travel in late 2022.

Airlines Reporting Corporation : US corporate and leisure ticket bookings (percentage vs 2019), 2021-2023

Source: Airlines Reporting Corporation .

...but rapid recovery expected for 2023

Despite the recent slowing performance, there is an increasing undercurrent of positive expectations for business travel for 2023.

Airlines, corporate travel management organisations, travel agencies and business travel associations are now pointing to a rapid recovery for 2023, particularly when it comes to business spending.

Global forward-ticketing data from Forward Keys indicates that after a slowing in business ticket sales over 2H2022, forward sales indicate that corporate air travel is due to accelerate through the early part of 2023.

ForwardKeys: forward business and leisure air ticket data, 2022-2023

Source: ForwardKeys.

The Global Business Travel Association (GNTA) projects global business travel spending of just under USD1.2 trillion in 2023.

While this is still down, around USD273 billion down on 2019 levels (-19.1%), the outlook is for overall spending to increase 24.2% year-on-year for 2023.

GBTA : business travel spending outlook, 2019-2026

Source: Global Business Travel Association .

Confidence in business travel nearly fully recovered to levels before the pandemic

GBTA 's Business Travel Outlook Poll for 1Q2023 found expectations for business travel in 2023, with confidence nearly fully recovered to levels before the COVID pandemic.

Of travel buyers - 91% reported that they feel that employees at their company are now either 'somewhat willing' or 'very willing' to travel for work in the current environment.

This is up from just 64% of reported workers who were willing to travel in Feb-2022, and 86% in Oct-2022.

According to GBTA 's polling, 78% travel managers globally expect their companies will engage in more business travel in 2023.

Expectations about travel volumes increases are almost uniform between the North America , Latin America , Europe and the Asia Pacific regions.

Just 7% of travel managers expect reduced travel.

Reduced travel expectations are lowest with travel managers in North America (6%) and the Asia Pacific (7%), and higher with managers in Europe (10%) and Latin America (13%).

Travel buyer/procurement: professional expectations for 2023 business travel volumes

More travel suppliers expect increased spending on travel by their corporate customers

Further to this, GBTA 's data shows that 86% of travel suppliers expect spending on travel by their corporate customers will increase in 2023 - up from 80% in the association's Oct-2022 survey.

This confidence is high, regardless of region - all travel suppliers surveys in the Asia Pacific expect spending to be somewhat or much higher than it was in 2022, followed by 91% in Latin America , 90% in Europe and 85% in North America .

Just 1% expect reduced spending by corporate customers.

Travel supplier/travel management company: expectations for 2023 business travel spending

Suppliers are also highly optimistic about the outlook for business travel.

According to GBTA polling, 24% report feeling 'very optimistic' about the industry's path to recovery, and 65% are optimistic. Just 3% report they are pessimistic about the outlook.

Travel suppliers expectations about higher spend are echoed by travel buyers and procurement professionals. Of those polled, 46% expect a higher budget for travel programmes for 2023 when compared to 2022, while 41% expect budgets will be about the same as the previous year.

Customer meetings and new business prospects to hold weight of business travel investment

The key area for business travel spending in 2023 is expected to be for trips for sales staff or account managers to meet with customers or new business prospects.

On average, travel managers estimate that their companies will allocate 28% of their travel spend for these purposes in 2023. This is followed by spending on trips for internal company meetings (19%) and spending on attending conferences, trade shows and other industry events (18%).

North American business travel to return to close to normal in 2023

The US Travel Association (USTA) project that the volume of business travel by air will recover to around 98% of pre-pandemic levels in 2023, with recovery back above 100% in 2024.

Domestic travel is at or above pre-pandemic levels, but international arrivals are still in recovery mode.

For 2022, inbound arrivals by foreign nationals into the US were down 24% compared to 2109. This was chiefly due to the slow rebound of traffic from the Asia Pacific , as well as some sluggishness in the early part of the year in Europe and parts of Latin America .

As of the start of Feb-2023, arrivals from mainland China were down 97% when compared to 2019, and arrivals from Hong Kong were still down by 80%.

Inbound travel from Japan was down 41.6%, and from Australia it was down 30.4%.

From Europe , UK arrivals were down 18.5%, while arrivals from Italy were still 14.2% below pre-pandemic levels and German arrivals were down 7%. Of the main Latin American markets, arrivals from Brazil were still a third below 2019 levels.

USTA estimates for Dec-2022 were that US business travel spending would be USD97 billion, which was an increase of 3% compared to pre-pandemic levels.

US business travel forecast: volume, percentage of 2019 levels, 2019-2026

Source: US Travel Association.

A large part of the recovery in US business travel spending has been due to the growth of prices, such as for airfares, car rentals and accommodation.

According to the USTA, airfares rose 28.5% year-on-year for the full year 2022.

US Bureau of Transport Statistics data shows US domestic fares averaged USD384 in 3Q2022. This is up from an (inflation adjusted) average domestic fare of USD279 in 3Q2020, an increase of 37.4% over the two-year period, and up 12.8% over the past 12 months.

US average domestic round trip airfares, by quarter, 1Q2019- 3Q2022

Source: US Bureau of Transportation Statistics.

Data from the corporate travel solutions provider Emburse shows that average spend per round trip domestic business travel by air for 4Q2022 was USD548, putting it just ahead of 4Q2019 levels.

Spend per round trip on international business travel was significantly higher: USD2113 in 4Q2022, vs USD1804 in 4Q2019 (an increase of 17.1%).

Domestic and international air travel: average spend per round trip, 4Q2019-4Q2022

Source: Emburse.

New hope for full recovery in 2023

COVID-19 has produced a range of changes that have altered the landscape of demand for business travel globally - some of which have slowed the recovery, and others that are contributing to business travel coming back, albeit in modified form or with higher spending.

Hybrid and remote working arrangements have persisted for a large proportion of workforces globally, cutting into historical business travel volumes, while at the same time creating greater demand for 'bleisure' travel.

Although video conferencing technology became ubiquitous during the pandemic, enterprises continue to report strong demand for face-to-face meetings, particularly given the uncertainties in global supply chains and the need to train new staff working from remote locations.

Additional layers of corporate travel approvals and duty of care arrangements introduced during the pandemic have proved stubborn to remove - particularly in large corporations. The response has been to consolidate multiple smaller business trips into larger - and often more costly - single trips.

In this same vein, sustainability considerations are also weighing much more heavily on travel activity, but businesses have also shown greater willingness to spend money to be good corporate citizens and offset the impact of their travel.

Despite the structural trends and concerns about an economic slowdown in developed economies, business travel has renewed its upwards trend.

Although the recovery is happening more slowly than expected, and is still well below where most airlines would like it to be, there is renewed confidence in the recovery outlook for 2023.

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2023 Global Business Travel Forecast

The price of flights, hotels, ground transportation, and meetings and events will continue to rise this year and next, says a report from CWT and the GBTA

Global travel prices will continue to rise significantly in the remaining months of 2022 and throughout 2023, according to a report out today from CWT and the GBTA.

The price of meetings and events is expected to climb particularly sharply this year, while air fares and hotel rates are also being pushed up, driven by soaring fuel prices, staff shortages and inflationary pressures in raw material costs.

According to the 2023 Global Business Travel Forecast, prices will continue to rise next year but not at such a dramatic rate.

“Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt,” said Patrick Andersen, CWT Chief Executive Officer.

“Labour shortages across the travel and hospitality industry, rising raw material prices, and greater awareness for responsible travel are all having an impact on services, but predicted pricing is, on the whole, on par with 2019.”

The report says the main forces exerting pressure on the economy and the business travel industry are Russia’s invasion of Ukraine, other geopolitical uncertainties, inflationary pressures, and the risk of further Covid outbreaks that could restrict business travel.

It also highlights that greater visibility at the point of sale for greener travel options, as well as carbon foot-printing and environmental impact assessment, as an opportunity for the travel industry to actively assist in responsible choice-making.

Meetings and events

The cost-per-attendee for meetings and events in 2022 is expected to be around 25% higher than 2019 and is forecast to rise by a further 7% in 2023.

Alongside pent-up demand, corporate events are now competing with many other types of events that were cancelled in 2020.

Demand is also being fuelled by the move to remote working, which means companies are now booking meeting spaces when staff gather in person.

Shorter lead times for events, varying from one to three months versus six to 12 months, are also contributing to this perfect storm, perhaps underscored by corporate concerns that the situation they face today could change very rapidly.

Air fares are expected to rise 48.5% in 2022 compared to 2021, but even with this steep price increase prices are expected to remain below pre-pandemic levels until 2023.

Following an increase of 48.5% in 2022, prices are expected to rise 8.4% in 2023.

Premium class tickets comprised over 7% of all tickets purchased in 2019. The share of premium class tickets fell to 6.5% in 2020 and to 4.5% in 2021 but have started to rise in 2022.

Through the first half of the year, premium tickets made up 6.2% of all tickets purchased.

The report says following two years of minimal to no expenditure, business travellers are likely to be willing to spend more on tickets, especially as availability reduces due to labour shortages.

Hotel rates

Hotel prices fell 13.3% in 2020 from 2019 and a further 9.5% in 2021, however the report expects them to rise 18.5% in 2022 followed by an 8.2% lift in 2023.

Hotel prices have already eclipsed 2019 levels in some areas such as Europe, the Middle East & Africa and North America and are expected do so globally by 2023.

Hotel rates have risen sharply in parts of the world including a 22% rise in North America – and a forecast 31.8% across Europe, the Middle East & Africa – driven by an accelerated recovery coupled with continued capacity constraints.

Hotel rate increases were initially driven by strong leisure travel in 2021 but group travel for corporate meetings and events is improving and transient business travel is similarly gaining healthy pace, putting further pressure on average daily hotel rates.

Ground transportation

Global car rental prices fell 2.5% in 2020 from 2019, before rising 5.1% in 2021.

Prices are expected to increase 7.3% in 2022, hitting new highs, and rise a further 6.8% in 2023.

The vehicle industry remains capacity constrained and rental agencies that reduced fleet sizes in the wake of the pandemic have not yet fully recovered – due in part to component shortages and supply chain disruptions that have reduced global auto production.

Rental agencies have reverted to buying used vehicles to increase fleet sizes and are keeping their vehicles longer.

Some agencies are also buying vehicles from auto-makers outside of their historically supported brands.

Skyrocketing prices, vehicle shortages and the need for visibility into carbon emissions from door-to-door are driving corporate travel managers to factor ground transport into full trip planning from the beginning.

* The 2023 Global Business Travel Forecast uses anonymised data generated by CWT and GBTA , with publicly available industry information, and econometric and statistical modelling developed by the Avrio Institute .

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Business Travel’s Rebound Is Being Hit by a Slowing Economy

By the early fall, domestic business travel was back up to nearly two-thirds of its prepandemic level. But companies have now begun to cut back.

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By Jane L. Levere

Business travel came back this year more strongly than most industry analysts had predicted in the depths of the pandemic, with domestic travel rebounding by this fall to about two-thirds of the 2019 level.

But in recent weeks, it appears to have hit a new hurdle — companies tightening their spending in a slowing economy.

Henry Harteveldt, a travel industry analyst for Atmosphere Research, said that corporate travel managers have told him in the last few weeks that companies have started to ban nonessential business travel and increase the number of executives needed to approve employee trips. He said he was now predicting that corporate travel would soften slightly for the rest of the year and probably remain tepid into the first quarter of 2023.

Mr. Harteveldt also said his conversations led him to believe that business travel would “come in below the levels airline executives discussed in their third-quarter earnings calls.”

Airlines were bullish on those earnings calls, a little over a month ago. Delta Air Lines, for one, said 90 percent of its corporate accounts “expect their travel to stay the same or increase” in the fourth quarter. United Airlines, too, said its strong third-quarter results suggested “durable trends for air travel demand that are more than fully offsetting any economic headwinds.”

Hotels, too, were optimistic. Christopher J. Nassetta, president and chief executive of Hilton, said on his earnings call that overall occupancy rates had reached more than 73 percent in the third quarter, with business travel showing growing strength.

The change in mood has come as the economy has more visibly slowed. Technology companies, in particular, have been announcing significant layoffs. Housing lenders have also been reducing staff, as rising mortgage rates cut into their business.

The travel industry has long relied on business travel for both its consistency and profitability, with companies often willing to spend more than leisure travelers. When the pandemic almost completely halted business travel in 2020, people were forced to meet via teleconference, and many analysts predicted that the industry would never fully recover.

But business travel did come back. As the economy reopened, companies realized that in-person meetings serve a purpose. In a survey taken in late September by the Global Business Travel Association, a trade group, corporate travel managers estimated that their employers’ business travel volume in their home countries was back up to 63 percent of prepandemic levels, and international business travel was at 50 percent of those levels.

One reason international business travel has not come back as strongly, Mr. Harteveldt said, is that some employers have imposed restrictions on high-priced business-class airline tickets for long-haul flights. He said employers are instead requiring travelers to take a cheaper connecting flight or to fly nonstop in premium economy or regular economy class.

“Travelers are telling managers they won’t fly long-haul in economy if they have to go directly to a meeting when they arrive,” Mr. Harteveldt said.

What will business travel look like in the next year?

Pandemic travel restrictions will probably play less of a role. A survey by Tourism Economics, U.S. Travel Association and J.D. Power released in October found that 42 percent of corporate executives had policies in place restricting business travel because of the pandemic, down from 50 percent in the second quarter. Over half expected pandemic-related business travel policies to be re-evaluated in the first half of 2023.

With Americans able to work remotely, many are combining professional and leisure travel, airline and hotel executives said on recent earnings calls. That was a big reason travel did not drop off in September, when the peak vacation period ended, as it used to in years past.

Jan Freitag, national director for hospitality market analytics at CoStar Group, said hotel occupancy by business travelers currently varies by market, with occupancies high in markets like Nashville, Miami and Tampa, Fla. — places where business travelers may well be taking “bleisure” trips. But hotel occupancies by business travelers are low in markets like Minneapolis, San Francisco and Houston.

Mr. Freitag said the lower hotel occupancies in some cities may reflect a lower return-to-office rate in those places, which reduces the ability to have in-person business meetings.

Mr. Freitag said he was “very bullish on group travel, trips for meetings, association events, to build internal culture.” Those trips will recover more quickly, he predicted, than individual business travel.

“It’s all about building relationships,” he said. “It’s very hard to do that online.”

On the other hand, short business meetings and employee training sessions may continue to be conducted online, which is less expensive than in person, said Grant Caplan, president of Procurigence, a consulting firm in Houston that advises companies on their spending for business travel, meetings and events.

Even as business travel has resumed, hotels, airlines and airports still have inadequate staffing. A survey of hoteliers by the American Hotel and Lodging Association, a trade group, released in October found that 87 percent of respondents were experiencing staffing shortages. Although that was an improvement over May , when 97 percent of respondents said they were short-staffed, the current findings do not bode well for smooth hotel stays.

Disruptions in flying, particularly in the United States and Europe — because of weather delays, inadequate flight crews or air traffic control and security issues at airports — have been notoriously high, particularly earlier this year.

Although “we can’t say that these disruptions have discouraged business travel, they have clearly complicated” the experience for travelers, said Kathy Bedell, senior vice president of the Americas and affiliate program for BCD Travel, a travel management company.

Kellie Kessler, a pharmaceutical clinical researcher in Raleigh, N.C., said the travel disruptions she faced this year were too much. She changed jobs recently to take one that requires her to travel on business 10 percent of the time, compared with 80 percent in her previous position.

“The reason I took a nontravel position is that I can count on one hand the number of on-time flights I had this year,” she said.

And flight disruptions have led to a decline in some road warriors’ loyalty to airlines, even those who have accrued elite status in the carriers’ frequent-flier programs.

“The disruptions overall have caused me to be less loyal to any one airline,” said Trey Thriffiley, chief executive of QIS Aviation Group a consulting company in Savannah, Ga., that advises individuals and companies about their use of private jets. He is also an elite member of the loyalty programs at Delta, United and American Airlines. “Instead of searching by preferred airline or even cheapest price,” he said, “I search for direct flights or connecting flights to cities closest to where I live that I can drive home from if I need to.”

Airlines’ bullish forecasts notwithstanding, some experts find prospects for business travel this fall and next year extremely murky.

They say they cannot accurately predict how strong business travel will be and what airfares and hotel room rates will look like because of many unknowns, including the duration of the war in Ukraine and its impact on the European and global economies; increasing gasoline and jet fuel prices; and rising inflation, recession fears and political uncertainty.

Mr. Harteveldt, the travel industry analyst, said the recovery of business travel varies by geographic region, with the United States rebounding faster than Europe.

He said the Chinese government could be using its reopening strategy “in a geopolitical way,” adding, “If a country is more friendly, China will grant access to that country’s business and leisure travelers rather than to travelers from countries with which China has greater political differences.”

He predicted that 2023 would be a “difficult year” for business travel unless the war in Ukraine “comes to an abrupt end and there is more certainty about oil and the price of jet fuel.” Also a factor, he said, could be decisions by companies that may have added too much staff during the pandemic to save money by reducing business travel rather than by laying people off.

“If there’s a symbol that can be used to describe the outlook for business travel in 2023, it’s a question mark,” he said. “No airline, travel management company or travel manager can be 100 percent certain what 2023 will bring right now. It’s one of the most confounding, confusing times to be in business travel, perhaps in decades.”

In a report issued in August, Mike Eggleton, director of research and intelligence at BCD Travel, had a similar take on the immediate future for business travel. “Producing a credible travel pricing forecast in the current environment is incredibly difficult,” he wrote. “The near-term travel outlook is more uncertain than ever. Volatility has never been so high and seems likely to persist. There’s vast variation in market performance and outlook.”

Going forward, Ms. Bedell said, perhaps the overriding question about business travel will be whether the trip is necessary.

“Client-facing and revenue-generating travel is taking a priority over internal meetings,” she said.

Business travel strong outlook in 2023 – GBTA

Contributors are not employed, compensated or governed by TD, opinions and statements are from the contributor directly

The last quarter of a calendar year can typically be busy and productive for global business travel and travellers. But in a time when so much isn’t back to being typical, where does the recovery of global business travel stand now? The  October 2022 Business Travel Recovery Poll released today by the Global Business Travel Association (GBTA), the world’s premier association serving the business travel industry, unveils the latest insights and sentiments from a survey of almost 600 business travel buyers, suppliers, and other stakeholders around the world. This survey marks the 29 th  poll in the GBTA series since the pandemic began to understand the path forward as the industry navigates recovery.

“We continue to see progress as business travel makes its way back to being a $1.4 trillion global industry, pre-pandemic. It is also important to understand the context of global business travel’s recovery. Asia is still opening its borders, international business travel in general started picking up only earlier this year across the globe, and the U.S. has only permitted unrestricted travel since June,” said Suzanne Neufang, CEO, GBTA. “Even as this latest poll shows economic considerations have eclipsed COVID-19 concerns, the industry is showing positive indicators and sentiment for 2023, a strong sign as business travel continues to come back over time,” she said.

Here are some of the key takeaways from the October GBTA Business Travel Recovery Poll:

• On average, travel managers estimate their company’s domestic business travel volume is back to 63% and international business travel is back to 50% of their 2019 pre-pandemic levels. In addition, 26% of respondents estimate their international business travel volume has recovered to more than 70% of their company’s pre-pandemic levels.
• When asked to choose among factors that are more likely to limit business travel next year, 80% of travel suppliers say economic conditions while only 4% cited COVID-19.
• However, 75% of travel buyers surveyed say their company had no immediate plans to limit business travel because of economic concerns. One-third (30%) say their company is unlikely to limit business travel, while 45% say they are taking a wait-and-see approach but are not seriously considering limiting business travel at this point due to economic concerns.
• Currently, 86% of survey respondents say non-essential domestic business travel is sometimes or usually allowed at their company. Additionally, 74% say the same for non-essential international business travel.
• Over three-fourths (78%) of travel managers expect the number of  business trips  taken by employees at their company will be higher or much higher in 2023 versus 2022.
• Among travel suppliers, 85% expect the number of  bookings  by corporate clients will be higher or much higher in 2023. Additionally, 80% of suppliers expect  travel spendin g by corporate clients will be higher or much higher in 2023 year over year.
• Over 65% of travel managers are optimistic that their company will conduct more  internal travel  and  external travel .  Internal travel was defined as meetings with colleagues or working at other company office locations, while external travel examples are trips for sales meetings and conference travel.

Tracking the Business Travel Impact of Remote Work and Blended Travel  

GBTA also continues to follow how evolving developments related to the future of work and changing workforces might play out in the global business travel landscape.

• The industry is embracing remote work models (88%), as 68% of respondents say their company has a hybrid approach where employees are expected to report to the office on some days and 20% indicate their company is working “full-time remote.” An additional 12% say they are “full-time in-office.”
• Of those with a hybrid or full-time remote work policy, 72% of respondents do not expect flexibility to work from home will impact the number of business trips taken by their employees. Additionally, 14% expect it will lead to more business travel while an identical percent expect it will lead to less business travel.
• For companies that allow hybrid or fully remote work, 44% say employees are allowed to work for extended periods outside of the city, state, or province where they are typically based. This also includes 22% that even allow employees to work for an extended period outside of their home-base country.
• Some companies even reimburse employees for costs or expenses while working remotely – 27% of respondents say their company does reimburse, while most do not (42%) or leave it to the manager’s discretion (25%).
• Many travel managers report they are seeing a rise in the desire for blended or “bleisure” travel among employees. Two in five travel managers (41%) have seen an increase in employees asking for blended travel, whereby they combine a business trip with a vacation or leisure component.

GBTA: Bookings, spending and optimism on the upswing

Innovating corporate travel programs for their business travellers

Technology plays a vital role in ensuring seamless travel

Global business travel recovery witnesses double-digit surge since February

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18 January 2023

2023 Business Travel Outlook

What a difference 12 months can make in travel. we commence 2023 with a much-welcomed sense of normalcy and familiarity in the travel experience, with traveller confidence, demand, and activity fast returning to pre-pandemic levels. businesses have now shifted their focus away from pandemic travel considerations and towards a more acute focus on regional economic impacts that may influence the form and function of the travel program’s strategy and budget..

As we enter the new year, we welcome the much-anticipated re-opening of China, the ‘final piece of the jigsaw puzzle’ creating a truly reconnected world. We expect China’s re-opening to add critical airline competition in regional and international markets in 2023, putting downward pressure on unsustainably high international airfare prices as extra services and seat capacity extends into the US, European and Australasian markets.

In our 2023 Business Travel Outlook , we share some of the latest global travel industry research alongside Corporate Travel Management (CTM) leaders’ expert insights to explore the key trends impacting travel pricing, technology, and sustainability in 2023 and beyond.

2023 Business Travel Snapshot

One of our key takeaways from the last few years of travel is learning from disruption and how our customers and their travellers continue to evolve, adapt and embrace new opportunities for engagement, collaboration, and growth.

According to research conducted by the Global Business Travel Association ( GBTA ) [1] released in October 2022, “ Economic considerations have eclipsed COVID concerns for the industry, but a majority of companies are not limiting their business travel specifically due to economic concerns.” Despite this shift in focus, the survey showed strong ongoing demand for business travel activity in 2023:

• 75% of Travel Managers said their company had no immediate plans to limit business travel because of economic concerns.
• 78% of Travel Managers expect the number of business trips employees take at their company will be higher or much higher in 2023 versus 2022.
• 80% of travel suppliers expect travel spending by corporate clients will be higher or much higher in 2023 .
• 66% of Travel Managers anticipate that their company will conduct more internal travel (colleague meetings or regional office travel) and 67% expect more non-internal travel (sales meetings/conference travel)in 2023 compared to 2022.
• 72% of respondents do not expect remote/flexible work models to impact the number of business trips their employees take . Additionally, 14% expect it will lead to more business travel .

[1] GBTA business travel recovery poll results – October 2022.

Supplier Snapshot

2023 will be a year of increased airline capacity and resources, improved service offerings, and new routes – better connecting our world. Setting the tone for an exciting year ahead, our teams are already witnessing a broad range of enhancements to supply services and routes across all CTM operating regions, positively impacting how our customers travel.

Australia & New Zealand

• Qantas and Virgin Australia: Announcing additional capacity increases for the end of March/April will see an additional 10% domestic capacity to the market.
• Virgin Australia: Introducing a new direct Cairns to Tokyo service commencing in late June.
• Singapore Airlines: Reintroducing their A380s into Melbourne to operate double daily flights effective mid-May. This will bring their capacity back to 76% of pre-COVID.
• With China reopening , major Chinese carriers will be recommencing flights, with Air China restarting Sydney services in early February with an initial offering of 3 flights per week.
• Emirates: Commencing February, Melbourne will become the second Australian destination to be served with the signature Emirates A380 featuring Premium Economy.
• Hong Kong fully reopened its borders with China on the 8 th of January, allowing 60,000 Hong Kong travellers to enter mainland China daily.
• Air China :  Doubling Hong Kong – Bejing flight services from twice to four times per week.
• China Southern: Resuming Hong Kong services to various key China routes commencing from the 12 th of January.
• Cathay Pacific:   Cathay Pacific will more than double its flights into the Chinese Mainland, operating 61 return flights per week between Hong Kong and 13 Mainland cities from 14 January 2023.
• Hong Kong Airlines: Plan to hire 1,000 workers and boost its number of flights to reach 75% of its operating capacity by the end of 2023 .

North America

• Delta airlines: Overall flight capacity in 1Q23 is expected to be only 1% down from 2019 levels.
• Airline resourcing: In response to challenges around service resumption, U.S. airlines have employed the most employees in nearly two decades.
• Rebound in air traffic between the S. and China is expected in late 1Q23, subject to government approval.
• American Airlines : Resuming non-stop flights to Shanghai from Dallas Forth Worth twice a week commencing late March.
• United Airlines: Implementing a large expansion of its North Atlantic schedule, including 3 new routes to and from Newark and Malaga, Stockholm, and Dubai. United’s total Trans-Atlantic capacity is expected to be 10% in 2022 and 30% in 2019.
• Air France and KLM: Flight capacity is back to 93% of 2019 levels. New routes are commencing and returning in 1Q23, including Aarhus, Innsbruck, and Salzburg, and increasing flights to China, Hong Kong, and Singapore.
• British Airways: Growth is predicted for North America, where the airline will service 27 U.S. destinations from London commencing in the summer of 2023.
• United Airlines: Increasing their daily flights from 17 to 23 between the UK and North America by the end of 1Q23. This includes a second daily service between Heathrow and Los Angeles and a daily service to Boston.
• Air Canada: Capacity is back to 95% of pre-pandemic levels, including all routes from the UK except services between Heathrow and Ottawa. This service is not likely to return before 2024.
• Lufthansa Group: There is a focus on regional flights, with Bristol-Zurich returning from the 4 th of February and Gatwick-Frankfurt / Belfast-Frankfurt returning on the 23 rd of April 2023. Lufthansa is also rolling out its long-haul product ‘Allegris’ during 2023, which will have a First Class Suite, a new Business Class Suite, and a Premium Economy product.

Business Travel Trends

At CTM, we witness exciting developments in how our customers travel for business and leisure, from their servicing needs and communications channels to technology adoption and content choices. 2023 is set to be no different, with many exciting new trends that will pave the way for more effective, sustainable, and personalised travel solutions in the year ahead.

CTM’s leaders share their insights and views on the key trends shaping travel program development and innovation in the travel industry in 2023.

Technology & Innovation

It is no secret that 2022 presented widespread resourcing challenges across the travel industry, as the rebound in travel activity out-paced recruitment and onboarding of staff across agent and airline service teams, airport services and security, and hoteliers. This challenge provided an opportunity for travel and hospitality businesses to innovate how they provide service to travellers, with advancements in the use of robotics, AI, and automation becoming key drivers to overcoming the industry’s resourcing challenges in 2023 and beyond.

Automation and AI will continue to change and enhance the way travel management companies (TMCs) deliver services and solutions to travellers throughout every step of the travel management experience and for every travel stakeholder. From trip research to travel booking, navigating airport processes, and in-trip experiences, technology can deliver exceptional customer outcomes at greater speeds, with more relevance and heightened personalisation, by automating manual processes. In turn, automation will allow greater capacity for human expertise to focus on managing more complex travel requirements, presenting a win-win-win scenario for travellers, corporate customers, and the travel industry in general.

CTM’s Global Chief Technology Officer, Mike Kubasik, explains how hyper-automation and robotics are transforming the travel and travel management experience:

“Hyper-automation involves the orchestrated use of multiple technologies, tools or platforms such as AI, machine learning, robotic process automation (RPA), integration platforms and low-code/no-code tools, to deliver high-speed outcomes via the users’ choice of service channel – whether that’s email, chat, in-app or phone.

“This type of technology investment behind the scenes will have a significant impact on the front-line traveller and travel arranger experience, as traditional booking and in-trip processes become faster and more relevant for customers. The use of hyper-automation enables us to identify, vet and automate processes, which frees up Travel Advisors’ time to focus on more complex service-related tasks. As advanced automation and AI continue to be built into the booking experience through online booking tools and the tools our Travel Advisors use to make offline bookings and service requests, it will ensure every avenue for booking and trip management is optimised for speed, relevance, and personal preference, all of which support increased customer satisfaction and efficiency.”

2023 will be an important year for sustainability across the travel industry as travel continues to demonstrate its role as a strategic enabler to reaching 2030 sustainability targets. Organisations globally increasingly rely on TMCs to support the delivery of their sustainability objective and targets through sustainable travel solutions.

Business travel can play a positive and important role in supporting businesses to reach their sustainability targets by reducing carbon emissions through the choice of environmentally-focused suppliers and travel options, including rail and electric vehicles, and by promoting sustainable travel practices, such as the use of locally engaged suppliers and enterprises that support community prosperity through employment and local sourcing of materials and products.

CTM’s Global Head of ESG & Sustainability, John Nicholls, explains:

“Social connection is a new travel trend in 2023, and one which requires social health and well-being enhancements across airlines, hoteliers, and car hire, in alignment with the UN Social Development Goals (SDGs). Corporate travel buyers and managers need to embrace local and social connections as part of their sustainability purpose to enhance the prosperity of people and communities.”

In 2023, we can expect to see an increase in collaborative partnerships between corporate clients, TMCs, and supply partners to deliver proactive sustainability benefits, with a continued focus on reducing and/or abating carbon footprints, advancements in the online booking experience to support sustainable travel booking behaviours, and widespread access to sustainable travel data that will support and enhance sustainable travel program development.

There has been much focus recently on developing Sustainable Aviation Fuels (SAF) as a leading solution to reduce airline emissions to meet Net Zero Targets. However, the scope of impact remains constrained by infrastructure, manufacturing and distribution limitations. We expect to see continued SAF investment across industry and airlines in 2023 and beyond, which will need to be coupled with Government support to overcome infrastructure and supply constraints.

Supply & Content

Traveller expectations are increasing, so the traveller experience will be increasingly important in 2023. Suppliers will be seeking to retain and gain new customers not just by simply offering low prices but equally by providing additional value through their services and experiences.

We can expect the airline industry to recover and gain momentum in 2023. The International Air Transport Association (IATA) has predicted that the airline industry could return to profit in 2023 as travel demand continues to build momentum.

The travel experience will continue to be a focal point in 2023, with airports and airlines continuing to navigate traveller expectations and remedy the pain points (cancellations, lost baggage, heightened screening, and security) around the passenger journey.

According to CAPA Centre for Aviation, traveller expectations have created a competitive landscape for airlines where experiences will be key to securing new customers. Travellers will be looking for more – whether that’s the best in-flight experience or premium class services – and will be willing to pay more for those services should they be deemed ‘valuable’.

Personalisation is gaining momentum. Measuring ‘value ’ in hotel programs is no longer just about cost but also the value in demonstrating sustainability practices, knowing unique traveller preferences, and delivering personalised experiences – including additional amenities, welcome gifts, pillow menus, and customised messages.

Hotels are also adapting to the remote worker movement, ensuring their facilities can accommodate co-working spaces, fast Wi-Fi, and meeting spaces, and adopting new technologies to service guests, whether through mobile check-in or virtual concierge chatbots that provide customer service around the clock.

Following meteoric growth in 2022, we expect hotel average daily rates (ADRs) in key markets to stabilise in 2023 as price elasticity increases and capacity and resourcing constraints level out. In markets still recovering from COVID-19, we expect moderate ADR gains in 2023.

Meetings & Events

Many businesses continue adapting to the unique needs, challenges, and opportunities presented by operating a more decentralised workforce. This global shift in workplace environments continues to challenge how businesses and their employees connect and collaborate to drive strategic outcomes. Ultimately, we can expect growing demand for more frequent, small-group, and in-person collaboration between internal and external stakeholders, putting pressure on venues and business services in key hub locations.

Advanced bookings will be key to controlling budgets while maintaining maximum choice and relevance for meetings venues. Additionally, companies and Travel Managers will need to be creative in developing engaging and strategically planned meetings and motivating employees in a more decentralised work environment in 2023.

Event Travel Management (ETM) Global Strategic Lead Tracey Edwards explains:

“ Booking well in advance to meet expectations around the destination and budget will be highly important going into 2023 with the high venue and accommodation demand. We are seeing up to 40% savings on venues when booked more than 6 months in advance. There are, however, more benefits to booking in advance, above and beyond securing availability.

“Equally, exploring opportunities to motivate, connect and reward employees will be key to attracting and retaining employees, from the frequency and style of face-to-face meetings to large group conferences and events. We are seeing an increased demand for incentive travel programs across our customer portfolio as an effective way to reward performance, build connections, and memorable one-in-a-lifetime experiences unique to the company and culture.

“The ability to plan an entire event experience for attendees that makes the most of the chosen destination, building in cultural experiences, meeting sustainability goals and tying back to the purpose of the meeting, incentive or event will also be important.”

In Conclusion

Our travel teams in every region continue to work closely with industry partners, customers, and our employees to ensure our services meet and exceed the needs of tomorrow’s travel environment. As we embark on 2023, we look forward to working with our customers and prospective customers to evolve and elevate their travel programs to embrace the opportunities of the new travel environment and to deliver more effective travel outcomes that drive business success.

Eager to find out more about the 2023 Business Travel Outlook?

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December 22nd, 2022 at 6:07 AM EST

Today’s edition of Skift’s daily podcast looks at the global outlook for 2023, top TV spenders in the U.S. this year, and Carnival's optimism.

Skift Daily Briefing Podcast

Listen to the day’s top travel stories in under four minutes every weekday.

Good morning from Skift. It’s Thursday, December 22, and here’s what you need to know about the business of travel today.

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Episode Notes

The travel industry is still facing hurdles such as a possible worldwide recession on its path to a full recovery. So what is the state of travel entering 2023? Skift Research delves into the topic and more with its newly published annual outlook for the travel industry, which features global revenue forecasts for sectors including airlines, hotels and cruise lines.

Senior research analyst Seth Borko writes that travel remains a mixed bag heading into the new year, with pent-up demand catapulting the Americas back to 2019 levels while Asia is beginning its recovery. But every region of the globe is seeing potential for growth, Borko adds.

The outlook also includes projections for cross-border trips between 2023 and 2025 as well as a look at how economic uncertainty could affect the travel industry.

Next, rising Covid cases in recent weeks are making some travelers cautious about going on cruises . Still, Carnival believes that’s not deterring consumers from booking cruises, with the company seeing a surge in bookings for 2023 sailings, reports Associate Editor Rashaad Jorden.

Carnival CEO Josh Weinstein didn’t provide any specific booking figures during Wednesday’s earnings call that reported its fiscal fourth quarter ending on November 30. But he said the desire of many travelers to put Covid behind them has contributed significantly to the booking surge. Weinstein added that Carnival posted a record in revenue per diem during the fourth quarter, adding the company placed 90 ships, roughly 35 percent of its fleet, back in service this year. Carnival generated $3.8 billion in revenue during the fourth quarter, which was 80 percent of 2019 levels. However, the company posted a $1.1 billion adjusted net loss.

We end today with a look at the biggest spending travel brands on U.S. TV in 2022 , through November. Airbnb has taken the top spot, reports Executive Editor Dennis Schaal in this week’s Online Travel Briefing.

Airbnb spent roughly $87 million on ads on national TV in the U.S. during the first 11 months of this year, according to TV analytics firm iSpot.tv. Schaal writes that Airbnb’s heavy emphasis on TV ads is not surprising, noting the company has been vocal about preferring brand advertising on TV to search engine marketing.

However, iSpot.tv found that budget hotel brand Choice Hotels has been the most seen travel company on TV throughout the U.S. in 2022. Choice Hotels ran 139 more ads in the first 11 months of this year compared to the same period in 2021.

The Daily Newsletter

Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.

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Tags: advertising , carnival , marketing , skift podcast , skift research

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The State of the Travel Industry in 2023: Current Trends and Future Outlook

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January 12, 2023

Featured Guest

Tony Capuano CEO, Marriott International, Inc.

Chip Rogers President & CEO, American Hotel & Lodging Association (AHLA)

As COVID-19 restrictions have continued to ease, the travel and hospitality industries have seen a resurgence in customers. Companies like Marriott have seen percentage increases in revenue and rate, even topping pre-pandemic levels.

During the U.S. Chamber of Commerce’s 2023 State of American Business event, Chip Rogers, President and CEO of the American Hotel and Lodging Association , and Tony Capuano, CEO of Marriott International, Inc. , sat down for a fireside chat. Read on for their insights on the post-COVID state of the travel industry, a shifting customer base, and the outlook for 2023 and beyond.

2022 Demonstrated the Power and Resilience of Travel

After declines amid the pandemic, 2022 brought about a positive recovery for the travel industry.

“[2022] reminded us of the power and resilience of travel,” said Capuano. “If you look at the forward bookings through the holiday season, [you’ll see] really strong and compelling numbers … so we’re really encouraged.”

“The only caveat I would give you about that optimism is, as you know, the booking windows are much shorter than we’ve seen them in a pre-pandemic world,” he added. “So those trends can change more quickly than we’re accustomed to."

The ‘Regular’ Customer Segments Are Shifting

At the start of pandemic recovery, industry leaders believed leisure travel would lead travel recovery, with business travel closely behind and group travel at a distant third, according to Capuano. While some of those predictions have held, others have shifted.

“Leisure [travel] continues to be exceedingly strong, and group [travel] has surprised to the upside,” he explained. “Business travel is perhaps the tortoise in this ‘Tortoise and the Hare,’ slow-and-steady recovery.”

However, Capuano noted customer segments are becoming less and less strictly defined.

“[There’s] this trend we've seen emerge over the pandemic of blended trip purpose … [where] more and more folks are combining leisure and business travel,” he said. “If this has staying power, I think it’s absolutely a game changer, as we get back to normal business travel and hopefully maintain that leisure travel.”

To accommodate this shifting demand, Marriott has focused on expanding offerings to accommodate both the business and leisure sides of travelers’ trips.

“[We’ve had] a very big focus on [expanding bandwidth], so that if [we’ve] got 300 rooms full of guests on Zoom calls simultaneously, we’ve got the bandwidth to cover it,” Capuano added. “[We’re also] being more thoughtful about fitness, leisure, and food and beverage offerings — and having the flexibility to pivot those offerings as somebody sheds their business suit on Thursday and changes into shorts and flip flops for the weekend.”

2023 Offers Hope for Continued Growth in the Travel and Hospitality Sectors

As the travel and hospitality sectors continue to grow and shift in the post-pandemic era, Capuano shared reasons for optimism in 2023.

“Number one, it's our people,” he emphasized. “When you see their passion, their enthusiasm, their resilience, their creativity, and just how joyful they are to have their hotels full again … it's hard not to be filled with optimism.”

“If you look at how far the industry has come over the last few years,” Capuano continued, “any lingering doubts folks may have had about the resilience of travel — and about the passion that the general public has to explore cities and countries — it's hard not to be excited about the future of our industry.”

• Post-Pandemic Work

From the Series

State of American Business

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Travelers delayed over 2.1M hours at airports last year: FAA says 'safety' and 'efficiency' is top priority

Passengers flying to and from an airport in utah last year experienced the longest flight delays across the country.

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Americans are unsurprisingly fed up with constant flight delays and cancellations across the U.S., and it is only to be expected. From 2023-2024, passengers lost over 2.1 million hours of time due to travel issues.

Data for 2 million flights from the Bureau of Transportation was probed, and a newly released Places to Travel report concluded that from Jan. 2023 to Feb. 2024, passengers lost 2,100,140 hours and 43 minutes of travel time as a result of delays.

A small regional airport in Utah, Provo Airport, accounted for the longest average flight delays during the allotted time period, according to the report. 

5 TOOLS TO SAVE YOUR TRIP AFTER A CANCELED OR DELAYED FLIGHT

Three airports in Florida made the top 10 list of worst airports with delays, according to a Places to Travel report that used Bureau of Transportation data to conclude its findings. (Getty Images / Getty Images)

Commercial airlines , Allegiant Air and American Airlines facilitate consumer travel to and from major cities within Provo.

"Both airlines flying out of Provo Airport are low cost carriers flying non-stop, point-to-point service," Brian Torgersen, Director at Provo Airport, told FOX Business via email.

"These airlines that currently operate in Provo do not have spare aircraft, or flight crews, sitting in Provo to plug into the schedule during extended delays," he added. "Aside from the first flights of the day, flights departing from Provo cannot leave until the aircraft arrives from its previous destinations, accruing delay throughout the day at every previous stop."

Torgersen added that other airports topping the Places to Travel list experience these same issues due to providing non-stop service to destinations, too. Planes experiencing mechanical issues or severe weather without a backup can create delays all day.

On average, the Beehive State airport hinders travel with an average delay time of 1 hour and 43 minutes. Of the 2,194 flights surveyed in and out of Provo, 39.74% of them were delayed.

A representative at the FAA provided FOX Business with safe summer travel documentation found on their website ahead of the upcoming busy months.

"Our job is to get you to your destination safely and efficiently," the FAA site reads . "This summer will see more planes in the skies, frequent bad weather, and increased use of the nation’s airspace. We are continuously working to address these challenges."

Provo Airport, a small regional airport in Utah, experienced the lengthiest flight delays for passengers from Jan. 2023-Feb. 2024. (Education Images/Universal Images Group via Getty Images / Getty Images)

Orlando Sanford International in Florida averages delay times for travelers of 1 hour and 35 minutes, according to the report. 

From Jan. 2023 to Feb. 2024, 9,847 flights landed at Orlando Sanford, and 28.09% of them were delayed. The report shows that passengers experienced 4,095 days, or 11 years, worth of delays.

Dallas Fort Worth International Airport accounted for 4,096 days worth of domestic and international impediments, with an average of 1 hour and 29 minutes in delays. Of the 308,806 flights arriving at Dallas Fort Worth, 66,105 of them, or 21.41%, were delayed.

Hilo International Airport in Hawaii had the shortest average delays of 40 minutes. 

In total, travelers lost 40 days due to delays in Hilo.

Of all the airports evaluated, three of the top 10 airports with the longest delays are located in Central Florida. In August, Florida airports first experienced lengthy lines of halted passengers that were later accompanied by cancelations due to Hurricane Idalia.

CRAZY AIRPORT, PLANE BRAWLS FROM RECENT FLIGHTS AROUND THE US

Of the over 9,800 flights flown into Orlando Sanford International in Florida last year, over 28% of them were delayed. ( (Joe Burbank/Orlando Sentinel/Tribune News Service via Getty Images) / Getty Images)

In mid-Feb., two members of Congress, Reps. Brian Mast, R-Fla., and Lois Frankel, D-Fla., failed to make it to Washington, D.C., in time for Homeland Security Secretary Alejandro Mayorkas' impeachment due to flight delays at Palm Beach International Airport.

At the time, Mast posted to X that he had been anticipating a flight for nine hours already.

Though Palm Beach does not appear on the list of airports with the worst delays, the location experienced a high volume of grounded planes for extensive periods of time around the holidays late last year.

Airports with the longest average delays, per the report:

• Provo Airport: 1 hour, 42 minutes
• Orlando Sanford International Airport: 1 hour, 34 minutes
• Dallas Fort Worth International Airport: 1 hour, 29 minutes
• Charlotte Douglas International Airport: 1 hour, 28 minutes
• Philadelphia International Airport: 1 hour, 26 minutes
• John F. Kennedy International Airport: 1 hour, 24 minutes
• St. Pete-Clearwater International Airport: 1 hour, 23 minutes
• Montgomery Regional Airport: 1 hour, 23 minutes
• Punta Gorda Airport: 1 hour, 23 minutes
• Phoenix-Mesa Gateway Airport: 1 hour, 21 minutes

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Airports across the U.S. with the shortest average delays:

• Hilo International Airport: 40 minutes
• Long Beach Airport: 43 minutes
• Kona International Airport: 44 minutes
• Lihue Airport: 44 minutes
• Charles M. Schulz-Sonoma County Airport: 48 minutes
• Kahului Airport: 48 minutes
• Fairbanks International Airport: 49 minutes
• Oakland International Airport: 49 minutes
• San Jose Mineta International Airport: 50 minutes
• Valley International Airport: 51 minutes

For more Lifestyle articles, visit www.foxbusiness.com/lifestyle.

Clarity? In this economy?

Jim LaPointe knows that how the economy feels “depends on your perspective.”

Four years after Covid-19 lockdowns kicked off a home fix-up frenzy, the central New Jersey contractor’s business remains through the roof. While Home Depot said earlier this month that customers are increasingly holding off on big projects , LaPointe is seeing the opposite. He’s been turning some clients away to avoid being “booked up a year in advance.”

“They’re going nuts with this,” he said of homeowners’ appetite for renovations.

It wasn’t long ago when a stock market smashing records and unemployment at decadeslong lows were huge advantages for an incumbent president. But today, with voters heading to the polls in little more than five months, it’s less clear what role the economy will play in an electorate that’s also fractured by immigration and abortion rights .

An NBC News poll last month found cost-of-living concerns remain top of mind for voters. While presumptive Republican nominee Donald Trump is seen — by a 52% to 30% margin — as better positioned to tackle inflation than his Democratic rival, President Joe Biden, 1 in 4 voters have yet to make up their minds about the race.

“We’re getting close to the period, usually in the summer, when public attitudes on the economy traditionally harden,” said Greg Valliere, chief U.S. policy strategist at AGF Investments, who so far sees Biden as “the clear underdog.”

The Biden campaign, which rejects that view, has been ramping up its economic messaging all year . It notes that the country dodged a much-forecast 2023 recession and weathered the Federal Reserve’s 11 interest rate hikes while continuing to add more jobs and small businesses .

The robust labor market and a Covid savings cushion mean many consumers continue to spend heavily, even those who face budget squeezes elsewhere. That financial push-and-pull is still clouding — and in some cases distorting — many households’ views of an otherwise sunny economy, while leaving others more hopeful.

‘I can’t run on the hamster wheel fast enough’

Meg Thomann, a communications director for a pharmaceutical company, is one of Jim LaPointe’s customers. She and her husband, an architect, are renovating the historic home they share with their three kids. While they have the disposable income to do so, Thomann said it still “feels like I can’t run on the hamster wheel fast enough.”

In the middle of fixing her roof and preparing to add a new deck, her homeowners insurance provider dropped her $3,000 a year policy. The new ones she found were at least triple that, which she suspects is because of her home’s age.

Thomann showed NBC News the quotes she had to choose from: “This one’s at $9,500. We got one at $10,500, and a whopping $12,800.”

Insurers have been hitting many homeowners with steep hikes since the pandemic, with some backing out of risky markets altogether . Insurance rates jumped 32% from 2019 to 2023, largely because of big storm payouts and inflation, according to the Insurance Information Institute.

While stubborn inflation has raised doubts about when the Fed might start cutting rates , many homeowners remain locked into low-rate mortgages in a market with fewer homes for sale than usual. For contractors like LaPointe, that has meant a steady stream of repairs and upgrades among those unable or unwilling to move. “They can’t go anywhere,” he said.

In the meantime, consumer spending is cooling but hardly collapsing. Retail sales came in flat for April after an unexpected jump in March . While executives at some big brands say consumers are finally tightening their belts, others see the reverse — with shifting shopping habits positioning them to prosper .

If you look at purchasing power, it is actually increasing.

Kayla Bruun, senior economist, Morning Consult

Many households, particularly low-income ones, are trimming their overall spending as credit card balances and delinquency rates balloon . But other consumers are cutting back in one area so they can keep shelling out in another.

In nearly every major U.S. city, restaurants have seen surging weekend and evening traffic more than compensate for lunchtime declines, the payment processor Square said this month. Airlines and cruise operators are bracing for another summer of record travel demand , including for high-end packages .

“If you look at purchasing power, it is actually increasing,” said Kayla Bruun, senior economist for Morning Consult. Average weekly wages are up around $200 since 2019 and are now rising faster than overall inflation — as they’ve done for roughly the past year .

‘Everything will work out’

The widespread pay and hiring gains of recent years have cooled off lately, but some job seekers remain confident nonetheless.

“I feel like everything will work out,” said Alexia Godinez-Thompson, 22, who graduated this spring with a communications degree from Howard University in Washington, D.C.

The class of 2024 is entering a still strong but slowing job market where demand for their diplomas has sagged. Employers are comparatively hungrier for part-time and service-sector roles that don’t require higher education, and the tech and media industries have been hit with painful layoffs this year.

Me personally, my single self cannot change how the economy’s going.

Alexia Godinez-Thompson, Howard University class of 2024

Godinez-Thompson started college in the depths of the pandemic, experiencing her first two semesters through a computer screen at her mom’s house in Raleigh, North Carolina. After that shaky start, she said, “I just feel like I’m not equipped to go into the workforce,” but added, “I don’t feel the need to stress that much over it.”

She’s already secured an arts internship with Bloomberg Philanthropies this summer, paying $24 an hour. And despite having only a few hundred dollars apiece in her checking and savings accounts, her longer-term job search is already bearing fruit, boosting her hopes.

“Me personally, my single self cannot change how the economy’s going,” she said. “I can only be here, right now.”

‘You kind of start out behind’

Many Americans are less Zen.

Consumer sentiment took a sharp dip this month after bounding higher around the start of the year. With inflation stuck in the mid-3% range, people “really feel the sting of having to pay more than they remember paying a few years ago,” Bruun said. Consumers are more likely to internalize these frustrations than celebrate any benefits from higher pay, stock gains or home equity, she added.

Shaquille Washington is a mother of two in Jackson, Mississippi, earning a little over $9 an hour cleaning hotel rooms. She loves being able to work while her young kids are in school and finishes in time to pick them up. But money is a constant struggle.

Earlier this month, as the Dow Jones Industrial Average topped 40,000 , she remarked that she doesn’t buy stocks, she buys groceries.

“The wages go up,” she said, but “the cost of living goes up times five.”

Prices in Jackson haven’t surged that high in reality, but inflation in the Southern region that includes Mississippi were 3.9% higher in April than the year before, hotter than the 3.4% rate nationwide . And Washington is paid less than the $12.41 hourly “poverty wage” threshold MIT researchers calculate for a single adult raising two children in the city — for whom a “living wage” would be $39.48.

Across the income spectrum, families have been blindsided by the costs of child care , which surpassed those of in-state college tuition in half the country , NetCredit researchers found last year.

I don’t think anybody our age is thinking when they’re in their early 20s, ‘I have a couple of years before I have to save for day care.’

Sarah Montoure, Cambridge, Wis.

In Cambridge, Wisconsin, nurse anesthetist Sarah Montoure and her husband, Kevin, who’s also a nurse, were facing the prospect of spending $665 a week on day care for their toddler son and infant daughter. With that expense threatening to gobble up one of their paychecks, they recently decided Kevin would begin staying home to care for the kids.

“It’s been, I guess, just shocking and at times disappointing to me that we can work really hard and start a family, and then you kind of start out behind,” said Montoure, 33. “I don’t think anybody our age is thinking when they’re in their early 20s, ‘I have a couple of years before I have to save for day care.’”

‘Retirement can be a reality’

Christina Cantu-McKay, however, gives her personal economy an A+ grade.

The 47-year-old law professor in Arizona spent more than two decades struggling with $100,000 in law school loans, making minimum payments that barely dented her balance as interest piled up. Then the Biden administration canceled it, to Cantu-McKay’s relief.

“I am starting to feel it now with my finances,” she said, with what used to be her student loan payments going into her 401(k). “Retirement can be a reality, and that’s pretty amazing.”

“It looks like I fit in the middle class now,” she said.

Christine Romans is the senior business correspondent at NBC News.

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Irish bosses upbeat amid global doom and gloom

If the global economy is expected to veer off the rails next year, then there is little sign of anxiety among Ireland’s business elite. Even as gloom descends on international stock markets amid fears of a deeper than anticipated recession, there have been no calls for this country to brace for impact.

Instead Ireland’s corporate leaders, in contrast to their counterparts in the UK and the US, remain cautiously optimistic.

Tony Smurfit, chief executive of Smurfit Kappa , one of the world’s largest paper-based packaging companies, said markets are pricing in “Armageddon” on the back of concerns over inflation and mounting geopolitical uncertainties.

“We have not seen this level of fear among the investing public for some time,” he said, adding: “Inflation makes you scared and wars make you scared.”

Last week the Bank of England warned that the UK is facing the longest recession on record as it struggles to suppress inflation, while alarm bells are also ringing over the US and European economies.

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The Federal Reserve is now raising American interest rates at a pace not seen since the early 1980s, prompting a growing number of economists to pencil in a recession in 2023. In Europe the story is much the same, even if the factors driving inflation are different, with supply-side pressures such as rising energy costs more to blame than labour shortages and inflated wages.

Last week Christine Lagarde, president of the European Central Bank, delivered a morose assessment of the bloc’s economic prospects, warning that “inflation is way too high” and said that to crush it would require more than a “mild recession”.

The bleak outlook has not been helped by rising geopolitical tensions. There is no end in sight to Russia’s war of aggression in Ukraine, and with China’s President Xi tightening his grip on the levers of power, many commentators fear that globalisation as we know it is nearing the end. What comes next is anyone’s guess.

Despite these doom-laden predictions, the mood in Ireland appears to be upbeat. While the global economic conditions are deteriorating, forcing large-scale layoffs in the technology sector, the prevailing view is that, however grim the situation becomes, Ireland will be spared the worst.

Growth rates are forecast to decline but the state will remain a recession-free zone. This bullish stance seems well supported: state coffers are overflowing, unemployment levels are at rock bottom, consumer spending remains robust and, after a decade of deleveraging, businesses and households appear relatively well prepared for any downturn.

Add the recent slew of earnings reports and the picture looks decidedly positive. Kerry Group and AIB both churned out strong third-quarter performances last month and at the same time lifted their full-year forecasts. Tomorrow Ryanair is widely expected to deliver blowout numbers.

Ibec too has cast Ireland’s future in a relatively rosy light. Last week the business group reaffirmed that a recession is not on the cards, although its chief economist Gerard Brady conceded that the coming sharp contraction in growth rates, which will reduce the level of economic expansion to levels last seen in the aftermath of the property crash, means that “for many people it will feel like one”.

But is this optimism misplaced given the financial and political turmoil sweeping the globe?

Ireland is a small, open economy; its prosperity hinges on fewer than a dozen multinationals maintaining their commitment to the country.

Latest exchequer returns, released last week, confirm just how narrow the tax base has become: a total of ten foreign-owned companies accounted for 60 per cent of receipts.

Paschal Donohoe, the minister for finance, has repeatedly warned about the dangers of this situation over the years, insisting that the “government must not build up permanent fiscal commitments on the basis of revenues that may prove transitory”.

For Brian Caulfield, a tech specialist and one of Ireland’s most prominent and successful venture capitalists, this heavy dependence on such a small group of multinationals poses one of the biggest economic threats.

He said there is likely to be a “big reduction” in the corporate tax take “next year or the year after” as global tech giants grapple with the harsher economic conditions. Earnings from the bigger players are likely to disappoint, he added, and that will “feed into lower profits and lower tax payments associated with those profits”.

In his view some companies “may decide to take a restructuring hit in order to right-size themselves” ahead of the next upswing in the economic cycle, which in turn will dent profits and curtail tax payments.

But Pat McCann, the former chief executive of the listed hotelier Dalata and a self-confessed “glass half-full person”, believes the slowdown in the tech sector will be “more than made up” for by the continued strength of the pharmaceutical and medtech industries.

He said foreign direct investment (FDI) continues to “thrive” in Ireland despite the problems buffeting the global economy.

It is a view seemingly reinforced by Pfizer’s reported decision to step up its operations in Ireland. The US drugmaker is said to have committed €1 billion to a new biotech plant in Dublin, which is likely to require an increase in its already 4,000-strong local workforce.

Yet the blast of good news is matched by a steady stream of reports about swingeing job cuts in the tech sector. Twitter, Stripe and Intel have all announced planned headcount reductions, while the software giant Oracle, which shelled out $28.3 billion this year on the acquisition of Cerner, a health technology company, is also swinging the axe.

Yet so confident is McCann in Ireland’s ability to withstand the storm that he is betting the economy will grow by 3 per cent next year. That beats Ibec’s 2 per cent estimate, although it still represents a handbrake check on the 13.6 per cent rate seen last year.

McCann, who sits on Ibec’s board, believes the strains in the economy are, to a large extent, a result of the quantitative easing or large stimulus packages “pushed through” during the pandemic.

Describing the current slowdown as inevitable, he believes that, “whatever happens on the world stage”, Ireland’s economy is well cushioned by a high volume of household savings.

While Smurfit is not quite as Tiggerish as McCann, he expects the country to swerve a recession and said that if it did occur, it would be “shallower” than anything experienced across the rest of Europe, owing to Ireland’s economic “momentum and resilience”.

Last week Smurfit Kappa unveiled pre-tax profits of €1.14 billion for the first nine months of 2022, but the share price performance has been choppy for much of the year.

Smurfit, a grandson of the company’s founder, Jefferson Smurfit, described the decline in the packaging business’s valuation as “kind of strange” but a product of the “fear factor” that has obscured the value of many high-performing companies.

Earlier in the year, following the outbreak of war in Ukraine, the packaging giant was struggling with volatile energy prices and in April announced that it was exiting Russia in response to the invasion. It is understood the company remains on course to sell its three facilities in the country before Christmas. But it is this combination of economic and geopolitical uncertainty that has Ireland’s captains of industry struggling to strike a definitive note.

Although there is optimism the country will avoid the pain forecast for other jurisdictions, Sean Mulryan, chairman and group chief executive of Ballymore Group, argued that Ireland’s economic fate remains unclear.

Ballymore is constructing a new urban quarter beside Connolly station in central Dublin. Mulryan expressed uncertainty about whether the country would slip into recession but said that “recession or not” the tougher conditions were unlikely to trigger a fall in house prices, given the long-running shortage of supply.

Colin Hunt, AIB’s chief executive, also numbers among the cautiously optimistic. He said that the Irish economy will feel the impact of the global slowdown, and reckoned that “domestic spending in particular is likely to weaken considerably next year”.

Pressed on a verdict, he said that “the pipeline of FDI and supportive stance of fiscal policy” mean that “we should be able to avoid a recession”.

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News & Insights

DAL, UAL, or LUV: Which Airline Stock Could Generate the Best Returns?

May 25, 2024 — 11:04 pm EDT

Written by Sirisha Bhogaraju for TipRanks  ->

Travel demand remains solid despite macro challenges and geopolitical tensions, helping airlines recover from the pandemic-led crisis. Airlines that are focused on enhancing travel experience, streamlining operations, and reducing the debt accumulated due to the COVID-led disruption are expected to perform well over the long term. Using TipRanks’ Stock Comparison Tool , we placed Delta Air Lines ( NYSE:DAL ), United Airlines ( NASDAQ:UAL ), and Southwest Airlines ( NYSE:LUV ) against each other to find the airline stock that could deliver the higher returns.

Delta Air Lines (NYSE:DAL)

Delta Air Lines impressed investors with stellar first-quarter results and robust guidance for the second quarter. The company’s operating revenue increased 6% to $12.6 billion, while earnings per share (EPS) jumped 80% to $0.45 . Strong travel trends and the company’s efficiency measures drove the Q1 performance.

It is worth noting that Delta generated free cash flow of $1.4 billion, even after reinvesting $1.1 billion in the business. Also, the company repaid nearly $1 billion of debt in the first quarter and expects to repay at least $4 billion of debt in 2024 as part of its efforts to bolster its balance sheet. Delta and other airlines accumulated massive debt when the pandemic-induced travel restrictions drastically hit the industry.

Delta Air Lines remains confident about achieving its full-year EPS target range of $6 to $7 and free cash flow outlook of $3 to $4 billion.

Is Delta Air Lines a Good Stock to Buy?

On May 13, HSBC analyst Achal Kumar initiated coverage of Delta Air Lines stock with a Buy rating and a price target of $72.80. The analyst called DAL his preferred play among U.S. airlines, citing its strong network mix and competitive positioning at all of its key hubs. Kumar thinks that the airline’s focus on the premium segment will drive healthy operating margins.  

Kumar highlighted that while Delta is the only airline with non-unionized labor, it still pays its employees quite well and shares its profits. This ensures good employee relationships and significantly lowers the risk of strikes.

Finally, Kumar noted that the company has a solid balance sheet, with a net debt/EBITDA ratio of only 2.7x, a strong free cash flow yield, and healthy profit margins.

Overall, with 18 unanimous Buys, Delta scores Wall Street’s Strong Buy consensus rating on TipRanks. The average DAL stock price target of $59.46 implies nearly 15% upside potential. Shares have risen about 29% so far in 2023.

United Airlines (NASDAQ:UAL)

United Airlines shares rallied after the company crushed analysts’ first-quarter estimates . The company reported a loss per share of $0.15, much lower than the loss of $0.54 per share projected by analysts. Revenue rose nearly 10% to $12.5 billion , thanks to robust travel demand and higher capacity.

The company impressed investors by maintaining its full-year earnings outlook despite the delay in aircraft deliveries by Boeing ( NYSE:BA ). UAL continues to project full-year 2024 adjusted EPS in the range of $9 to $11. It expects to receive just 61 narrow-body planes this year compared to the prior estimate of 101.

Coming to Q2, UAL sees continued strength in the U.S. and Atlantic, but pressure on its business in the Pacific and Latin America regions.

Is UAL a Good Investment?

On May 17, Wolfe Research analyst Scott Group upgraded United Continental stock from Hold to Buy with a price target of $76. The analyst believes that while UAL stock has rallied strongly year-to-date, he sees more room to run due to strong fundamentals, supported by international business, premium cabin offering, and the company’s loyalty program.

The analyst expects domestic main cabin trends to improve in the second half of the year, as capacity growth finally moderates in line with GDP. At a P/E (price-to-earnings) multiple of 6x, Group finds UAL’s valuation compelling and sees huge upside potential over the next 6-12 months.

With 12 Buys and three Holds, United Airlines stock scores a Strong Buy consensus rating. At $66.55, the average price target implies 28.7% upside potential. Shares have advanced more than 25% year-to-date.

Southwest Airlines (NYSE:LUV)

Southwest Airlines is under pressure as it operates an all-Boeing 737 fleet and is severely impacted by Boeing’s aircraft delays due to quality and safety issues. The carrier expects to receive 20 Boeing 737 Max 8 planes compared to its prior projection of 46 aircraft. Southwest cautioned investors that it expects to face significant challenges this year and in 2025 due to delivery delays.

For Q1 2024, Southwest reported a loss per share of $0.36 , which was higher than the Street’s estimate of a loss per share of $0.32. The weakness in Southwest’s financials is expected to persist in the quarters ahead. While the airline continues to re-optimize schedules for the second half of the year, it currently expects aircraft seats and trip frequency to fall year-over-year in Q3 and Q4 2024.    

Is Southwest Stock a Buy or Hold?

On May 13, HSBC’s Achal Kumar initiated coverage of Southwest Airlines stock with a Hold rating and a price target of $27.80. The analyst thinks that the airline’s high dependency on Boeing Max aircraft could limit capacity growth, adding pressure to costs on unfavorable earnings momentum.

Kumar added that while Southwest’s competitive positioning is healthy, it might struggle to improve operating margins.

Wall Street has a Hold consensus rating on Southwest Airlines stock based on four Buys, nine Holds, and one Sell recommendation. The average LUV stock price target of $29.77 implies nearly 11% upside potential. Shares have declined 7% year-to-date.  

Wall Street is highly bullish on Delta and United Airlines but remains sidelined on Southwest. They see higher upside potential in United Airlines compared to the other two airline stocks. As per TipRanks’ Smart Score System, UAL stock earns a “Perfect 10,” indicating that it could outperform the broader market over the long run.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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17 January 2023

2023 Business Travel Outlook

What a difference 12 months can make in travel. we commence 2023 with a much-welcomed sense of normalcy and familiarity in the travel experience, with traveler confidence, demand, and activity fast returning to pre-pandemic levels. businesses have now shifted their focus away from pandemic travel considerations, and towards a more acute focus on regional economic impacts that may influence the form and function of the travel program’s strategy and budget..

As we enter the new year, we welcome the much-anticipated re-opening of China, the ‘final piece of the jigsaw puzzle’ creating a truly reconnected world. We expect China’s re-opening to add critical airline competition in regional and international markets in 2023, putting downward pressure on unsustainably high international airfare prices as extra services and seat capacity extends into the US, European and Australasian markets.

In our 2023 Business Travel Outlook , we share some of the latest global travel industry research alongside Corporate Travel Management (CTM) leaders’ expert insights to explore the key trends impacting travel pricing, technology, and sustainability in 2023 and beyond.

2023 Business Travel Snapshot

One of our key takeaways from the last few years of travel is learning from disruption and how our customers and their travelers continue to evolve, adapt and embrace new opportunities for engagement, collaboration, and growth.

According to research conducted by the Global Business Travel Association ( GBTA ) [1] released in October 2022, “ Economic considerations have eclipsed COVID concerns for the industry, but a majority of companies are not limiting their business travel specifically due to economic concerns.” Despite this shift in focus, the survey showed strong ongoing demand for business travel activity in 2023:

• 75% of Travel Managers said their company had no immediate plans to limit business travel because of economic concerns.
• 78% of Travel Managers expect the number of business trips taken by employees at their company will be higher or much higher in 2023 versus 2022.
• 80% of travel suppliers expect travel spending by corporate clients will be higher or much higher in 2023 .
• 66% of Travel Managers anticipate that their company will conduct more internal travel (colleague meetings or regional office travel)  and 67% expect more non-internal travel (sales meetings/conference travel)in 2023 compared to 2022.
• 72% of respondents do not expect remote/flexible work models to impact the number of business trips taken by their employees. Additionally, 14% expect it will lead to more business travel .

[1] GBTA business travel recovery poll results – October 2022.

Supplier Snapshot

2023 will be a year of increased airline capacity and resources, improved service offerings, and new routes – better connecting our world. Setting the tone for an exciting year ahead, our teams are already witnessing a broad range of enhancements to supply services and routes across all CTM operating regions, positively impacting the way our customers travel.

• Hong Kong fully reopened its borders with China on the 8 th of January, allowing 60,000 Hong Kong travelers to enter mainland China daily.
• Air China :  Doubling Hong Kong – Bejing flight services from twice to four times per week.
• China Southern: Resuming Hong Kong services to various key China routes commencing from the 12 th of January.
• Cathay Pacific:   Cathay Pacific will more than double its flights into the Chinese Mainland, operating 61 return flights per week between Hong Kong and 13 Mainland cities from 14 January 2023.
• Hong Kong Airlines: Plan to hire 1,000 workers and boost its number of flights as it seeks to reach 75% of its operating capacity by the end of 2023 .

Australia & New Zealand

• Qantas and Virgin Australia: Announcing additional capacity increases for the end of March/April which will see an additional 10% domestic capacity to the market.
• Virgin Australia: Introducing a new direct Cairns to Tokyo service commencing in late June.
• Singapore Airlines: Reintroducing their A380s into Melbourne to operate double daily flights effective mid-May. This will bring their capacity back to 76% of pre-COVID.
• With China reopening , major Chinese carriers will be recommencing flights with Air China restarting Sydney services in early February with an initial offering of 3 flights per week.
• Emirates: Commencing February, Melbourne will become the second Australian destination to be served with the signature Emirates A380 featuring Premium Economy.

North America

• Delta airlines: Overall flight capacity in 1Q23 is expected to be only 1% down from 2019 levels.
• Airline resourcing: In response to challenges around service resumption, collectively U.S. airlines have now employed the most employees in nearly two decades.
• Rebound in air traffic between the U.S. and China is expected in late 1Q23 subject to government approval.
• American Airlines : Resuming non-stop flights to Shanghai from Dallas Forth Worth twice a week commencing late March.
• United Airlines: Implementing a large expansion of its North Atlantic schedule including 3 new routes to and from Newark and Malaga, Stockholm, and Dubai. United’s total Trans-Atlantic capacity is expected to be 10% over 2022 and 30% over 2019 levels.
• Air France and KLM: Flight capacity is back to 93% of 2019 levels. New routes are commencing and returning in 1Q23 including Aarhus, Innsbruck, and Salzburg, and increasing flights to China, Hong Kong, and Singapore.
• British Airways: Growth is predicted for North America where the airline will service 27 U.S. destinations from London commencing in the summer of 2023.
• United Airlines: Increasing their daily flights from 17 to 23 between the UK and North America by the end of 1Q23. This includes a second daily service between Heathrow and Los Angeles, in addition to a daily service to Boston.
• Air Canada: Capacity is back to 95% of pre-pandemic levels, including all routes from the UK except services between Heathrow and Ottawa. This service is not likely to return before 2024.
• Lufthansa Group: There is a focus on regional flights with Bristol-Zurich returning from the 4 th of February and Gatwick-Frankfurt / Belfast-Frankfurt returning on the 23 rd of April 2023. Lufthansa is also rolling out their long-haul product ‘Allegris’ during 2023 which will have a First Class Suite, a new Business Class Suite, and a Premium Economy product.

Business Travel Trends

At CTM, we continue to witness exciting developments in the way our customers travel for business and leisure, from their servicing needs and communications channels to technology adoption and content choices. 2023 is set to be no different, with many exciting new trends arising which will pave the way for more effective, more sustainable, and more personalized travel solutions in the year ahead.

CTM’s leaders share their insights and views on the key trends shaping travel program development and innovation in the travel industry in 2023.

Technology & Innovation

It is no secret that 2022 presented widespread resourcing challenges across the travel industry, as the rebound in travel activity out-paced recruitment and onboarding of staff across agent and airline service teams, airport services and security, and hoteliers. This challenge provided an opportunity for travel and hospitality businesses to innovate the way they provide service to travelers, with advancements in the use of robotics, AI, and automation becoming key drivers to overcoming the industry’s resourcing challenges in 2023 and beyond.

Automation and AI will continue to change and enhance the way travel management companies (TMCs) deliver services and solutions to travelers throughout every step of the travel management experience and for every travel stakeholder. From trip research to travel booking, navigating airport processes, and in-trip experiences, technology has the power to deliver exceptional outcomes for customers at greater speeds, with more relevance and heightened personalization by automating manual processes. In turn, automation will allow greater capacity for human expertise to focus on managing more complex travel requirements, presenting a win-win-win scenario for travelers, corporate customers, and the travel industry in general.

CTM’s Global Chief Technology Officer, Mike Kubasik explains how hyper-automation and robotics are transforming the travel and travel management experience:

“Hyper-automation involves the orchestrated use of multiple technologies, tools or platforms such as AI, machine learning, robotic process automation (RPA), integration platforms and low-code/no-code tools, to deliver high-speed outcomes via the users’ choice of service channel – whether that’s email, chat, in-app or phone.

“This type of technology investment behind the scenes will have a significant impact on the front-line traveler and travel arranger experience, as traditional booking and in-trip processes become faster and more relevant for customers. The use of hyper-automation enables us to identify, vet and automate processes, which frees up Travel Advisors’ time to focus on more complex service-related tasks. As advanced automation and AI continue to be built into the booking experience, through online booking tools and the tools our Travel Advisors use to make offline bookings and service requests, it will ensure every avenue for booking and trip management is optimized for speed, relevance, and personal preference, all of which support increased customer satisfaction and efficiency.”

2023 will be an important year for sustainability across the travel industry, as travel continues to demonstrate its role as a strategic enabler to reaching 2030 sustainability targets. Organizations globally now increasingly rely on TMCs to support the delivery of their sustainability objective and targets through sustainable travel solutions.

Business travel can play a positive and important role in supporting businesses to reach their sustainability targets, by reducing carbon emissions through the choice of environmentally-focused suppliers and travel options, including rail and electric vehicles, and by promoting sustainable travel practices, such as the use of locally engaged suppliers and enterprises that support community prosperity through employment and local sourcing of materials and products.

CTM’s Global Head of ESG & Sustainability, John Nicholls explains:

“Social connection is a new travel trend in 2023, and one which requires social health and well-being enhancements across airlines, hoteliers, and car hire, in alignment with the UN Social Development Goals (SDGs). Corporate travel buyers and managers need to embrace local and social connections as part of their sustainability purpose to enhance the prosperity of people and communities.”

In 2023, we can expect to see an increase in collaborative partnerships between corporate clients, TMCs, and supply partners to deliver proactive sustainability benefits, with a continued focus on reducing and/or abating carbon footprints, advancements in the online booking experience to support sustainable travel booking behaviors, and widespread access to sustainable travel data that will support and enhance sustainable travel program development.

There has been much focus recently on the development of Sustainable Aviation Fuels (SAF) as a leading solution to reduce airline emissions to meet Net Zero Targets. However, the scope of impact remains constrained by infrastructure, manufacturing and distribution limitations. We expect to see continued SAF investment across industry and airlines in 2023 and beyond, which will need to be coupled with Government support to overcome infrastructure and supply constraints.

Supply & Content

Traveler expectations are increasing and, as such, the traveler experience will be increasingly important in 2023. Suppliers will be seeking to retain and gain new customers not just by simply offering low prices, but equally by providing additional value through their services and experiences.

We can expect to see the airline industry recover and gain momentum in 2023. The International Air Transport Association (IATA) has predicted that the airline industry could return to profit in 2023 as travel demand continues to build momentum.

The travel experience will continue to be a focal point in 2023, with airports and airlines continuing to navigate traveler expectations and remedy the pain points (cancellations, lost baggage, heightened screening, and security) around the passenger journey.

According to CAPA Centre for Aviation, traveler expectations have created a competitive landscape for airlines where experiences will be key to securing new customers. Travelers will be looking for more – whether that’s the best in-flight experience or premium class services – and will be willing to pay more for those services should they be deemed ‘valuable’.

Personalization is gaining momentum. Measuring ‘value’ in hotel programs is no longer just about cost, but also the value in demonstrating sustainability practices as well as knowing unique traveler preferences and delivering personalized experiences – including additional amenities, welcome gifts, pillow menus, and customized messages.

Hotels are also adapting to the remote worker movement, ensuring their facilities can accommodate co-working spaces, fast Wi-Fi, and meeting spaces, and adopting new technologies to service guests, whether through mobile check-in or virtual concierge chatbots that provide customer service around the clock.

Following meteoric growth in 2022, we expect hotel average daily rates (ADRs) in key markets to show some stabilization in 2023 as price elasticity increases and capacity and resourcing constraints level out. In markets still recovering from COVID-19, we expect to see some moderate ADR gains in 2023.

Meetings & Events

Many businesses are continuing to adapt to the unique needs, challenges, and opportunities presented by operating a more decentralized workforce. This global shift in workplace environments continues to challenge the way businesses and their employees connect and collaborate to drive strategic outcomes. Ultimately, we can expect to see growing demand for more frequent, small-group, and in-person collaboration between both internal and external stakeholders, putting pressure on venues and business services in key hub locations.

Advanced bookings will be key to controlling budgets while maintaining maximum choice and relevance for meetings venues. Additionally, companies and Travel Managers will need to be creative in their development of engaging and strategically planned meetings, and in motivating employees in a more decentralized work environment in 2023.

Event Travel Management (ETM) Global Strategic Lead, Tracey Edwards explains:

“ Booking well in advance to meet expectations around the destination and budget will be of high importance going into 2023 with the high venue and accommodation demand. We are seeing savings of up to 40% on venues when booked more than 6 months in advance. There are however more benefits to booking in advance above and beyond securing availability.

“Equally, exploring opportunities to motivate, connect and reward employees will be key to attracting and retaining employees, from the frequency and style of face-to-face meetings to large group conferences and events. We are seeing an increased demand for incentive travel programs across our customer portfolio as an effective way to reward performance, build connections, and memorable one-in-a-lifetime experiences that are unique to the company and culture.

“The ability to plan an entire event experience for attendees that makes the most of the chosen destination, building in cultural experiences, meeting sustainability goals and tying back to the purpose of the meeting, incentive or event will also be important.”

In Conclusion

Our travel teams in every region continue to work closely with industry partners, customers, and our employees to ensure our services meet and exceed the needs of tomorrow’s travel environment. As we embark on 2023, we look forward to working with our customers and prospective customers to evolve and elevate their travel programs to embrace the opportunities of the new travel environment and to deliver more effective travel outcomes that drive business success.

Eager to find out more about the 2023 Business Travel Outlook?

Contact our expert travel team today to discuss your travel needs.

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Why mortgage rates are doomed to stay above 7% for the foreseeable future

• Housing experts were betting on mortgage rates to decline this year on looser Fed policy.
• Yet, the 30-year mortgage rate has been stuck around 7% all year. 
• Freddie Mac and Fannie Mae say they expect mortgages to stay in the 7% range through 2024.

Interest rate forecasts have been volatile through 2024, as early bets for a policy pivot have consistently been let down.

With the Federal Reserve looking unlikely to ease rates before September, housing market analysts are recalibrating mortgage rate outlooks, as home loan rates are heavily influenced by the Fed funds rate. 

Following the excitement of waning inflation at the end of 2023, which prompted calls for as many as seven Fed rate cuts in 2024, a string of discouraging consumer price index reports in the first quarter has prompted a shift.

The Fed has grown more cautious since the start of the year. Public remarks from central bankers in recent weeks have signaled no rush to loosen policy, and some market commentators have said they're even  eyeing another rate hike before a dovish pivot. 

That's complicated the outlook for all kinds of borrowing costs for consumers and businesses, and notably, it has made the outlook for mortgage rates much less rosy for potential buyers this year. 

Government-sponsored mortgage finance giants Fannie Mae and Freddi Mac have pushed their forecasts for mortgage rates back up.

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In a report this month , Fannie estimated that the 30-year mortgage could creep up to 7.1% in the coming quarters, before easing slightly by the end of the year. That's well above the 6.4% forecast it held in April . 

Freddie Mac has also adjusted its prediction. 

"Our baseline scenario has one Federal Reserve rate cut towards the end of the year. As a result, we expect mortgage rates to remain elevated through most of 2024," the government-sponsored enterprise wrote in its midyear outlook .

"The question our economics team is asked most frequently by industry participants remains where we think mortgage rates are headed," chief economist Doug Duncan said in the report. "For now, we see rates remaining closer to 7 percent through the end of the year – before trending downward in 2025 – but note potential downside to that forecast given recent actual movements in rates."

High rates have added to a number of market burdens for both buyers and sellers, and consumers have largely stuck to the sidelines as a result. While there are some encouraging signs for prospective buyers , such as more inventory and less price appreciation, the market is still tight. 

Many homeowners originally bought their property when mortgage rates were as low as 3%, and the steep rise since has disincentivized selling. According to Freddie Mac, six out of 10 mortgages have a rate below 4%, locking those owners into their lower costs. 

With fewer existing homes on the market, a dearth of housing supply has caused prices to soar in the last 18 months.  

"Move-up buyers feel stuck because they're ready for their next house, but it just doesn't make financial sense to sell with current interest rates so high," Redfin Premier agent Sam Brinton said in a recent report . 

Home prices hit a fresh record this month, reaching $387,600 in the four weeks through May 19, Redfin said. Between that and mortgage rate highs, median monthly housing payments are sitting just $20 below recent all-time highs.

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Plus, a tornado destroys a truck stop in Texas, Tesla challenges the trucking industry, and Craig Fuller issues a warning about the upcoming hurricane season.

ACT Expo 2024: Tesla Challenges Trucking Industry & Other Highlights

ACT Expo 2024: Tesla, J.B. Hunt, and Kenworth Push the Future of Trucking

The Advanced Clean Truck (ACT) Expo 2024 in Las Vegas was a major event for the trucking industry, showcasing the latest in electric and alternative fuel vehicle technologies. Here are the key highlights from the expo, featuring Tesla’s bold challenges, J.B. Hunt’s insights on tech and policy misalignment, and Kenworth’s innovative SuperTruck 2.

Tesla’s Bold Challenge to the Trucking Industry

Tesla made its debut at the ACT Expo, presenting its Tesla Semi and setting a high bar for electric trucking. Dan Priestley, head of Tesla Semi, delivered a powerful message: it’s time for the trucking industry to fully embrace electric vehicles (EVs).

• Tesla's Presence : First appearance at ACT Expo with the Tesla Semi available for rides.
• Production Goals : Plans to produce 50,000 Semis annually by 2026.
• Message : “Challenge the historic model. Develop a fully purposed EV,” said Priestley.

Priestley emphasized that the Tesla Semi is the only purpose-built electric truck, offering superior efficiency and range compared to competitors. He warned that fleets taking a slow, cautious approach to adopting EVs would fall behind. “You’re going to be half a decade behind,” he stated.

J.B. Hunt on Misalignment of Technology, Policies, and Economics

Shelley Simpson, president of J.B. Hunt Transport Services, highlighted the misalignment between sustainable technology, regulatory policies, and economic realities. Her insights underscored the challenges the industry faces in reducing emissions while maintaining economic viability.

• Tech and Policy Misalignment : Simpson pointed out the conflicts between state and federal regulations, which complicate interstate operations.
• Economic Viability : She emphasized that while zero-emission vehicles are crucial, they are not yet economically viable at scale.
• Infrastructure Needs : Simpson stressed the importance of building adequate charging infrastructure to support widespread adoption of electric trucks.

Simpson’s comments resonate deeply as the industry grapples with high upfront costs, a soft freight market, and insufficient infrastructure. “For one electric truck, you need the same electricity that it takes to power 600 homes,” she explained, highlighting the scale of the challenge.

Kenworth Unveils SuperTruck 2

Kenworth showcased its SuperTruck 2, a high-efficiency concept vehicle developed over six years with funding from the U.S. Department of Energy and Paccar Inc. This innovative truck combines cutting-edge aerodynamics with a reimagined interior.

• Design Innovations : Features a bullet train-like sloped profile and a center-positioned driver’s seat.
• Efficiency Gains : Demonstrates a 136% gain in freight-ton efficiency compared to the 2009 T660 model.
• Hybrid Power : Equipped with a Paccar MX-11 engine and a 48-volt electric generator supporting a mild hybrid system.

The SuperTruck 2 showcases numerous weight-saving innovations, such as concept tires and a smaller fuel tank, resulting in significant efficiency improvements. “We wanted to push this beyond just a demonstrator truck,” said Jonathan Duncan, Kenworth’s design director.

The 2024 ACT Expo highlighted the trucking industry’s strides towards a more sustainable future. Tesla’s bold challenge, J.B. Hunt’s call for alignment in technology and policies, and Kenworth’s innovative SuperTruck 2 all point towards an industry on the brink of significant transformation.

Sources: ACT News | FreightWaves | Transport Topics

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Adriana Pulley

Hi! I'm Adriana and I've been working for FreightCaviar as Head Writer for a little over a year now. Some of my favorite topics to cover are FreightTech, Green Freight, and nearshoring/reshoring.

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A top Wall Street bear has turned bullish on stocks, boosting his S&P 500 price target by 20%

• Morgan Stanley's top stock strategist has ditched his bearish call on the stock market. 
• In a note on Sunday, Mike Wilson increased his S&P 500 price target by 20% to 5,400.
• Wilson has been bearish for years, correctly calling the decline in 2022 but fighting the rally throughout 2023.

A top bear on Wall Street just threw in the towel and turned bullish after a big rally in the stock market.

Morgan Stanley's CIO Mike Wilson ditched his bearish call in a note on Sunday, increasing his 12-month S&P 500 price target by 20% to 5,400.

Wilson had previously held a 4,500 price target on the S&P 500. The new bullish forecast from Wilson would represent fresh record highs for the benchmark index, marking potential upside of about 2% from current levels.

"Our 2024 and 2025 earnings growth forecasts (8% and 13%, respectively) assume healthy, mid-single-digit top-line growth in addition to margin expansion in both years as positive operating leverage resumes," Wilson said.

Wilson's base-case S&P 500 price target of 5,400 is derived from a 19x price-to-earnings multiple on 12-month forward earnings per share estimate of $283 by June 2026. 

Wilson said the stock market could surge an additional 20%, to 6,350 on the S&P 500 in his bull case scenario. That optimistic scenario would be driven by stronger earnings per share growth in the range of 11% to 15%, "driven by continued fiscal support and cyclical/structural drivers out to 2026 alongside multiple expansion to ~21x," Wilson explained.

Wilson first turned bearish on US stocks in 2021, correctly warning of a potential 20% decline in the S&P 500.

That decline quickly materialized just a few months later in 2022, but since then, the S&P 500 has rallied 52% from its October 2022 low, with Wilson fighting the rally throughout 2023 and the first few months of this year.

With Wilson now in the bullish camp on stocks, that leaves JPMorgan's Dubravko Lakos-Bujas and Marko Kolanovic as one of the few bears left on Wall Street. JPMorgan maintains a year-end price target of 4,200 for the S&P 500, representing potential downside of 21% from current levels.

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