Corporate travel managers surveyed this month by Morgan Stanley project their businesses' 2024 travel budgets on average will increase 6 percent year over year, a figure slightly lower than respondents projected last fall, but still representing "encouraging" growth, according to the company.
The 140 respondents, who were surveyed May 1-15 and represent firms around the world with about $5 billion in aggregate annual corporate travel spend, also projected 2025 travel budgets would increase on average 6.2 percent year over year, according to a new Morgan Stanley report, released Wednesday.
In Morgan Stanley's prior survey of travel managers in October 2023, respondents on average projected an 8 percent year-over-year increase in 2024 travel budgets.
In this survey, respondents—all of whom have "primary or shared responsibility for managing corporate travel needs and negotiating with hotels," according to Morgan Stanley—projected travel budgets in the first half of 2024 would increase 6.7 percent year over year and 5.4 percent in the second half. About 15 percent said their budgets in the first half would decline, as did 11 percent for the second half and 8 percent for 2025.
About 48 percent of respondents indicated their organizations' travel budgets already had reached pre-pandemic levels, up from 40 percent in the fall. However, about 25 percent projected their budgets never would return to pre-Covid levels, up from 13 percent in the October survey, which Morgan Stanley called "somewhat concerning."
Still, respondents projected their organizations would book 8.7 percent more hotel rooms on average in 2024 than 2023, and then 8.3 percent more year over year in 2025. Morgan Stanley said these figures, along with the expectation for higher travel budgets, suggest that hotels' general expectation for low-single-digit year-over-year gains in 2025 revenue per available room might be a bit light. (PwC this month projected a 2025 U.S. RevPAR gain of 0.7 percent.)
About 12 percent of respondents' organizational travel volume in 2024 will be replaced by virtual meetings, they projected, a similar figure to the October 2023 survey and comparable to the share they project to replace in 2025.
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