According to the most recent report from Advantage Travel Partnership, the corporate travel sector is anticipated to rebound to 75% of pre-Covid transactions by the end of 2022. London-based Advantage, the second-largest TMC network in Europe, predicted that reservations for this year will increase by 83% compared to 2021, despite being 25% lower than in 2019.
The data was published in Advantage’s most recent Global Business Travel Review 3.0 report, which was prepared in conjunction with data expert Travelogix. In comparison to the prior pre-pandemic year, when the average transaction value was £295.50, the average transaction value increased by 12.4% to £333.32 this year. As the pandemic kept most business travelers at home in 2020 and 2021, transaction value decreased to an average of £106.12 in 2020 and £145.12 in 2021.
Guy Snelgar, the worldwide business travel director of the Advantage Travel Partnership, said that the previous six months have been a “tale of recovery and growth” even though several segments of the sector have had well-publicized disruptions and capacity restrictions. Since early July, according to Advantage, booking patterns have been “quite consistent” after seeing substantial fluctuation in the spring. Although the consortium emphasized that business travel had not yet “returned to usual seasonality.”
A further trend is that travelers are taking longer journeys, with the average length increasing to 6.7 days from 4.6 days in 2022. According to Advantage, this reflects the aim of corporations to make travel “more meaningful” post-Covid. In 2022, there will be a normalization of booking horizons, with the average period between booking and travel increasing to 21,1 days. Although this result lags below the 2019 average of 23.4 days, it represents a significant improvement over the 9.8-day average lead time recorded in 2018.
Advantage anticipates that the trend of extending lead times will continue next year, and by the end of the first quarter of 2023, lead times should approach or perhaps surpass the 2019 average.
“Looking at the business travel industry over the past last six months it has been a story of recovery and growth, despite considerable ongoing disruption and capacity challenges,” added Snelgar.
“While we are confident that travel demand will yield great volumes in 2023, an increase in airline capacity and scheduling will be key to the recovery of pre-pandemic numbers. With that in mind, we maintain our original forecast of full recovery to 2019 figures for a full 12-month period in April 2024-March 2025.”
Refunds have proven to be “a problem” for TMCs in 2022, especially with so many summertime airline schedule disruptions. Advantage said that one out of every 86 reservation were refunded during the third quarter, compared to one out of every 49 bookings during the first three months of the year. Thankfully, October’s reimbursements for TMCs saw a “huge drop” since the problem seems to be “settling.”
“We put this down to the huge reduction in capacity and availability in the sense that travelers are, overall, having to stick with the bookings they have if they want to travel,” said the report.
Chris Lewis, founder and CEO of Travelogix, summed up: “While the summer demonstrated no real clear signs of standard seasonality, there were glimmers of a recovering industry that we cannot ignore, even when factoring in the UK’s economic woes, geopolitical unrest and, of course, the capacity and scheduling restrictions we are seeing in the aviation space”.
“As an industry, we are around 25 percent away from reaching the transaction volumes we saw back in 2019, which shows just how far we have come.”