Business Travel is Coming Back
Business travel is making a strong comeback, and hotels need to be prepared to meet the evolving needs of corporate travelers. After a significant decline in 2020, spending on international business travel is expected to surpass pre-pandemic levels by 2024. With the projected growth in the sector, it’s crucial for hotels to understand the current trends and implement strategies that will help them thrive in the changing landscape.
A Comeback for Conferences and Exhibitions
Conferences and exhibitions are driving the resurgence of corporate travel. These events provide networking opportunities and in-person experiences that fuel demand and revenue generation. The Global Association of the Exhibition Industry (UFI) reported a steady increase in exhibition activity throughout 2023, with 90% of companies reporting “normal activity” in the second half of the year. Hotels stand to benefit the most from these segments, as they are the preferred accommodation option for attendees.
Pro Tip: To attract conference and exhibition attendees, hotels should offer special packages that cater to the unique needs of business travelers. Providing amenities such as dedicated meeting spaces, high-speed internet, and business services can make a significant difference in attracting this segment.
Strong Recoveries and Developing Markets
While China and the U.S. continue to be the largest markets for business travel, North America and Western Europe are expected to experience the most robust recoveries. These regions have well-established infrastructure and increasing corporate travel budgets. The Asia-Pacific (APAC) region is also set for a comeback, with China predicted to reclaim its position as the industry’s number-one market by the end of 2023.
Pro Tip: Hotels should keep an eye on emerging markets like India and the Middle East and Africa (MEA), which are experiencing promising recoveries and investing in infrastructure to support global business events. Establishing partnerships and expanding operations in these regions can lead to long-term growth opportunities.
Pharmaceuticals and Technology Leading the Way
Different sectors embrace the return of in-person travel at varying rates. Industries such as finance and pharmaceuticals have demonstrated substantial growth, relying on face-to-face interactions to close deals and drive investment. The technology sector, although slower to rebound, is expected to play a vital role in the business travel economy. Both pharmaceuticals and technology are catalysts for MICE travel, and hotels should cater to the specific needs of these sectors.
Pro Tip: Hotels can tailor their offerings to attract sector-specific business travelers. Offering specialized services, such as secure meeting spaces for pharmaceutical companies or technology-enabled conference facilities, can give hotels a competitive edge in attracting these high-value guests.
The New Realities of Business Travel
As business travel demand increases, several factors are impacting the sector. Favorable economic conditions and growing stability have contributed to a steady financial landscape. Chinese travelers are returning to the skies, and companies recognize the value of in-person events in achieving their business objectives. However, elevated airfares and room rates, labor shortages, geopolitical instability, and increased competition from leisure travelers pose challenges to the industry.
Pro Tip: To navigate the changing landscape, hotels should focus on delivering exceptional value and service to business travelers. Offering competitive rates, personalized experiences, and seamless technology integration can help hotels differentiate themselves and attract corporate guests.
The Enduring Popularity of Hybrid Events
Hybrid events, which combine in-person and virtual elements, have become popular among business leaders. This format allows companies to enjoy the benefits of in-person events while reducing costs and environmental impact. Hotels can position themselves as attractive venues for hybrid events by investing in technology infrastructure, reliable internet access, and skilled moderators who can foster engagement in a virtual setting.
Pro Tip: Hotels should market themselves as hybrid event venues and promote their technology capabilities. Providing turnkey solutions for hybrid events, including tech support and immersive experiences, can help hotels capture a significant share of this growing market.
A Focus on Eco-Friendly Offerings
Sustainability is a top concern for companies, and travel accounts for a significant portion of carbon emissions. Businesses are actively seeking ways to reduce the environmental impact of travel and are more likely to favor hotels and airlines with eco-friendly offerings. Hotels can differentiate themselves by promoting energy-efficient systems, eco-certifications, and sustainably sourced products.
Pro Tip: Implementing sustainable practices throughout the hotel operations, such as reducing waste, conserving energy, and supporting local communities, can attract environmentally conscious business travelers and set hotels apart from the competition.
Evolving Supplier Dynamics
Hotels have gained more bargaining power in contract negotiations with buyers, as many supplier contracts were frozen during the pandemic. While airline prices are dropping, hotels, especially in Europe, are holding firm on rates. This shift in the buyer and supplier dynamic requires both parties to adapt their approaches to negotiations and findmutually beneficial solutions. Hotels should focus on demonstrating the unique value they offer, such as flexible cancellation policies, personalized services, and innovative amenities, to secure corporate contracts.
Pro Tip: Hotels should be proactive in building relationships with corporate travel managers and buyers. Offering exclusive benefits, loyalty programs, and personalized services can strengthen these partnerships and increase the likelihood of securing long-term contracts.
The resurgence of business travel presents significant opportunities for hotels to thrive in the coming years. By understanding the latest trends and implementing strategic measures, hotels can attract corporate travelers and position themselves as preferred accommodation options. Whether through tailored offerings for specific industries, embracing hybrid events, prioritizing sustainability, or adapting to evolving supplier dynamics, hotels can navigate the changing landscape and tap into the growing business travel market.
