Business travel is expected to soar in 2025, with 42% of companies forecast to spend more than in 2024. Despite this, pressure remains on travel managers to control spending as global business travel costs are projected to experience modest increases in 2025. Yet can planning ahead deliver cost savings and added value to your business travel budget?
Find the best airfares
Reed & Mackay Global Fares Pricing Specialist Jo Shilling isn’t surprised by this increase. “Airline costs, especially for fuel and labour, have risen over the past few years and I expect this to be reflected in short-term pricing,” Shilling says. “Nevertheless, everything feels more stable now, possibly due to increased airline capacity and cooling leisure demand after several busy post-COVID years.”
Despite this stability, factors such as geopolitical tensions, inflationary pressures and ESG concerns continue to influence pricing. “We are seeing longer flight routes taken to avoid certain airspaces, which impacts both flight duration and fuel use. We’ve also seen an increase in fuel-related taxes, which fluctuate during times of global uncertainty,” Shilling says. Given these variables, should travel managers still plan their travel budgets in advance? Shilling highlights that booking corporate travel flights further ahead can provide value and enhance business efficiency.
“While airlines’ advance purchase fares don’t offer the same flexibility as regular corporate fares, they can offer huge savings,” Shilling explains. “And you can book 11 months in advance, for most airlines” she says. “So, if an organisation is booking for conferences or meetings where dates are set, it makes sense to book early. This approach not only saves on costs but removes the worry of availability for key flights at the right time, all within budget. Additionally, preferred seats for travellers are easier to secure.”
Careful planning also helps if unexpected travel arises, allowing for spare budget funds to cover last-minute needs. Shilling also notes that advance budgeting can aid with “trip-batching” or combining multiple meetings into one trip. This approach can help manage costs, support sustainability goals and promote traveller wellbeing.
Find the best hotel rates
“I predict a continued upward trend in hotel rates, particularly in key corporate locations and during peak travel seasons,” Reed & Mackay Director of Lodging Partnerships Tanya Whitney says.
Sixty-eight per cent of respondents to the 2024 BTN Annual Hotel Survey also anticipated their corporate hotel rates for 2025 will increase. One of the reasons? “Inflation will continue to impact operational costs for hotels, from staffing to utilities and supplies,” Whitney explains. “So far, a 5% increase seems typical in 2025 rate negotiations.
“Additionally, we’re seeing more last-room availability (LRA) charges, along with an increase in non-LRA for fixed client-negotiated rates. When combined with dynamic pricing, it is difficult for corporates to maintain stable rates, often resulting in higher prices during peak periods.”
Reed & Mackay clients benefit from the Navan Lodging Collection Hotel Programme, providing a wide range of content and competitive rates. This programme ensures clients have relevant choices aligned with their needs and travel policies.
Embracing future hotel trends
While large hotel chains remain popular with corporate travellers, demand for boutique and smaller hotels is growing. “More travellers are seeking unique experiences, viewing rooms as personalised retreats,” Whitney says. “VIP corporate travellers are increasingly choosing luxury boutique hotels for their personalised service and privacy. This enables them to relax after a long day while being productive.”
Technology developments, especially AI, will continue to transform hotel operations and shape guest experiences. “Investments in technology, such as contactless check-in and mobile room keys, will enhance the guest experience,” Whitney adds.
Finally, sustainability remains a priority for travellers. Hotels investing in eco-friendly practices may command higher rates due to their appeal to environmentally conscious corporate clients. So if companies can plan accommodation further in advance, it could be a helpful way to incorporate evolving choices and manage budgets more effectively.
Mail hellouae@reedmackay.com to discuss all of your corporate travel and event management needs.
