Current state of business travel revealed in HotelHub Index

HotelHub, a prominent provider of hotel technology solutions for travel management companies (TMCs) and corporate customers, has unveiled its Q1 2024 HotelHub Index, shedding light on the current state of business travel.

The analysis, based on 15 million bookings, indicates a drastic decline in international business travel and a marked increase in hotel costs, particularly in London.

According to the data, international trips fell by 19% year over year, with companies increasingly favouring domestic travel.

Domestic bookings now account for 62% of all corporate travel, up from 52% in Q1 2023. This represents a significant shift from the gradual recovery of overseas business trips observed since the end of the pandemic. The trend suggests that businesses are exercising caution amid economic uncertainties, opting to deploy staff within their own countries rather than incurring the higher costs associated with international travel.

Growth in domestic business travel has been particularly pronounced in Asia, with a 46% increase, and in Europe, with a 30% rise. In North America, 81% of business stays are now domestic, reflecting a 5% increase compared to Q1 2023.

Inflationary pressures remain evident within the travel industry.

The HotelHub Index reveals that the average room rate per night has risen by 8% globally, climbing from USD $164 to USD $177. Over the past two years, average rates have surged by 12% in New York, 22% in London, and 27% in Paris. Business travellers appear to be condensing trips to stay within budget constraints as the average cost of a trip rose by 7%, from USD $414 in Q1 2023 to USD $442 in Q1 2024.

There is also a noticeable decrease in the average duration of stays in certain regions. In Asia, the average stay duration has dropped by 8%, while in the Middle East and Africa, it has fallen by 11%. Despite these trends, the average length of international trips increased by 5.3%, indicating that while international travel may be less frequent, business travellers are extending their trips to maximise productivity when they do travel.

Paul Raymond, Director of Business Development at HotelHub, commented on the findings, stating: "On the whole, business travel is still growing, but there are some concerning trends in this data. A reduction in international trips is often an indicator of overall business confidence and broader spending in the corporate sector."

"The rate of inflation may be falling in some areas of the economy, but in hospitality we're still seeing significant price increases that many corporate travel departments are finding challenging."

Raymond emphasised that while the data highlights industry-wide trends, each business has unique travel needs. He suggested that by booking through platforms such as HotelHub, companies could better manage their travel strategies to mitigate rising costs.