August 11, 2022 | By Bronwen Largier

While there is expected to be big year-on-year increases in airfares and hotel rates in 2022 followed by smaller rises in 2023, significant decreases in both these costs during the first two years of the pandemic will keep prices roughly at 2019 levels according to the 2023 Global Business Travel Forecast.

However, despite these component prices staying steady, the report also notes that the cost-per-delegate for meetings and events is expected to be 25 per cent higher in 2022 compared to 2019, with another 7 per cent rise anticipated for 2023.

Air fares are expected to rise 48.5 per cent year-on-year in 2022 and a further 8.45 per cent in 2023 with hotel rates expected to jump 18.5 per cent in 2022 and another 8.2 per cent in 2023.

These rises are offset by a 12 per cent drop in airfares between 2019 and 2020, followed by a 26 per cent drop in 2021, and a 13.3 per cent reduction in hotel rates in 2020 and a further 9.5 per cent reduction in 2021.

The forecast is a joint effort between global travel management platform for employees, CWT, and the Global Business Travel Association.

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

“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.”

Overall, reasons for price rises in 2022 are thought to be due to Russia’s invasion of Ukraine, other geopolitical uncertainties and the continued risk of COVID outbreaks and their potential impact on business travel. Inflation pressures are also noted as a cause of price rises, but micenet notes that inflation itself is partly being driven by the Russian invasion and the cost of workforce shortages which is a result of the pandemic and the new era of “living with COVID”.

For meetings and events, the much lauded pent-up demand, coupled with a desire for companies to build company culture – presumably supercharged after two years of lockdowns and remote working – and the uncertain economic outlook is thought to be driving price increases.

The forecast also notes that competition for event space, due to companies with downsized offices now requiring external meeting space and events postponed during 2020 and 2021 being delivered in 2022, may be driving price increases too.

The rise in food and beverage costs for events was flagged as being particularly stark, with the largest global rises seen in Asia Pacific with costs up 120 per cent per attendee in 2022 compared to 2019.