Accelerating business travel | By Jamie Mago

Despite ending 2022 still 29% below 2019 levels, transit and group business travel saw significant progress this year.

With the traditional summer vacation behind us and demand for leisure travel “normalizing”, it is increasingly important that business travel – both transient and group – continues to grow. And the signs are there.

Lodging data confirms accelerated recovery in business and group travel.

STR reported that the hotel industry ended the month of September strongly, with room demand the second highest for the month.

  • Weekday occupancy increased, particularly in the 25 largest US hotel markets. Notably, San Francisco reported the highest weekday occupancy during the last week of September at nearly 90%.

In the past year, demand for corporate and association groups has returned stronger than transient.

  • According to STR, group employment figures are already approaching 2019 demand levels and are expected to reach 2019 levels this fall.

At this point, group bookings are booming. This happens in so many companies. The power of human connection cannot be underestimated. Connections between people make creativity work, elevate the human spirit. This will sustain the journey. Mark Khoplamazian, CEO of Hyatt

Trends we’re seeing:

  • Slow and steady recovery: In its latest third-quarter earnings, Delta Airlines reported strong travel demand continued into the summer, largely driven by international travel and the continued slow but steady recovery in business travel. American Express also recently reported that declining demand for leisure travel will be replaced by continued growth in business travel, meetings and events.
  • Small and medium-sized companies leading:
    Traditionally more nimble and more innovative small and medium-sized companies continue to drive the transitional business recovery and prioritize business travel. Many companies are developing their products to better meet the needs of small and medium-sized businesses.
  • Back-to-office boost: Corporations also report that the slow but steady return of office workers, particularly in urban areas, is boosting demand for transient business travel. Hyatt CEO Mark Khoplamazian confirmed that transient business bookings are up in New York, while corporate bookings everywhere except Asia are “boom”.
  • Bleisure continues to grow: Almost half of global employees (46%) plan to travel for work or leisure in 2024, and more than a third of Gen Z and Millennial business travelers say they plan to extend business travel to enjoy in your free time before or after your work duties.
  • The increase in the price of the hotel leads to a change in the locations of the event: Hotel prices are expected to increase, especially in major convention destinations such as Chicago and Dallas. Additionally, cities with limited supply, such as Boston, could see significant price increases. As a result of the higher rates, many major conferences and events have moved out of major urban centers to secondary markets, including Milwaukee, Albuquerque and Fort Myers.
  • Flexible working conditions: As many business travelers choose to maximize their time on the road by incorporating opportunities for work, family, friends and leisure, blended travel has increased demand for extended stay hotels. Hilton has seen the length of stay of temporary business travelers increase by 15% compared to 2019.
  • Evolving Product Offerings: As leisure and corporate travel look increasingly similar, global hotel chains are responding by expanding extended-stay offerings, including high-speed WiFi and later departures, to facilitate remote work. Global hotel chains including Marriott, Hilton, Hyatt and Wyndham have expanded their extended-stay offerings, including new brands such as the Project H3 by Hilton condo brand.

Bottom line: The desire to meet face to face cannot be understated. And while some challenges still remain, as office occupancy increases, the economy stabilizes, many traditional seasonal travel trends return, and group demand continues to accelerate, it looks like business travel isn’t slowing down anytime soon.

Greg Staley
United States Travel Association

Business travel in the USA

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