BTSA: Travel Costs Begin to Outrun Budgets; Still, Few Cos. Limit Trips

Data from Business Travel Show America shows travel budgets are on the rise for 2027, thanks to a reality check in 2026 that travel costs are staying elevated for the foreseeable future and the negotiation environment remains challenging given strong travel demand scenarios and growing supplier confidence.

CoStar data supports that analysis. It’s most recent forecast for U.S. hotel performance predicted year-over-year U.S. revenue per available room growth in 2026 of 4.4 percent, up significantly from its 2.8 percent projection in early June. The rise in RevPAR will be driven largely by rate and not by realizing efficiencies. Though CoStar researchers cited both leisure and business travel demand increases, overall occupancy forecasts show only slight upward movements. Stronger demand and occupancy increases may be concentrated at the upper ends of the service tier spectrum.

Airlines, too, are telegraphing confidence, with executives on recent earnings calls citing corporate revenues rising mid-20 percent range and even higher in the second quarter for American Airlines, Delta Air Lines and United Airlines. All airlines reported strong corporate demand alongside premium leisure demand, which is helping to push rates up. Fuel costs, which remain elevated due to geopolitical volatility in the Middle East, also are contributing to high ticket costs.  

In that environment, nearly one-third of business travel buyers surveyed by Business Travel Show America indicated travel costs have risen more than they anticipated during the first half of 2026, while nearly half said they had anticipated the pricing hikes. Notably, 15 percent of buyers added the color that they had already outrun their organizations’ 2026 business travel budgets, just half way through the year.

While a quarter of organizations said they are reviewing trip volume and attempting to reduce travel, that leaves three-quarters of businesses with no negative impact to volumes. The BTSA survey did not inquire if buyer organizations were experiencing increased trip volumes that might indicate an overall offset to cited reductions, but supplier data shared in quarterly earnings indicates strong business travel performance. Both American and United cited material demand increases from the contracted corporate sector. Hotels sent more mixed signals but cited increased corporate transient revenue alongside inventory constraints.

Regardless of trip volume trends, the BTSA survey found 44 percent of buyers expect their organizations to spend more on corporate travel in 2027 compared to this year. Nearly 40 percent anticipate no change, and only 16 percent expect a decrease. That corresponds to CoStar forecasted rate gains for the U.S. hotel market and with average ticket prices pegged by ARC at $581 in January and $629 in June, with suppliers bullish on maintaining rate even after fuel cost increases subside.

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