Strategic planning for business travel: what to expect in 2025

As the post-pandemic world stabilises, business travellers and travel managers are grappling with new challenges.

With business class fares climbing and flights seeing record occupancy rates, recent insights from the FCM Consulting Q3 2024 Business Travel Report indicate that travel expenses are poised to increase further in 2025.

Yet, amidst the escalating costs lies an opportunity for proactive planning.

Bonnie Smith, the General Manager of FCM South Africa, unveiled the dual narrative reflected in the data: while travel is undoubtedly becoming pricier, it is also exhibiting a level of predictability not seen in recent years.

“Yes, travel is getting more expensive, but it’s also becoming more predictable,” she explained.

Smith stated that travel managers who book ahead are saving on airfares and getting better hotel rates.

“The opportunity to be strategic with your travel spend has never been greater,” she said.

Looking at the data, Smith discusses what to expect in corporate travel for 2025.

The sky’s getting crowded

Gone are the days when airports felt deserted, a stark contrast to the ghost-town airports of 2020.

In August 2024, global passenger demand increased by 8.6% compared to last year, leading to a staggering flight load factor of 86.2%.

While business class tickets have seen an increase of 6 to 8% compared to 2023, economy fares have surprisingly dipped by 1 to 4% — a silver lining for budget-conscious travellers.

For those delaying crucial meetings in major hubs like London, New York, or Dubai, now may be the perfect time to secure bookings.

“Those ‘last-minute-Larry’ days are behind us – the early bird really does get the window seat and the better fare these days.” Smith remarked, underscoring the importance of forward planning.

The hotel squeeze

If your hotel bills in Johannesburg have been looking unusually high, you’re not alone. Smith revealed that room rates have surged by 14%. For those trips to New York, prepare for a staggering average rate of $490 a night, a 15% bump.

“The average room rate is up in North America (6.8%), South America (25.4%), and Europe (5.3%), with only a gentle softening of prices observed in the Middle East/Africa, Asia, and Australia.”

This price increase calls for savvy accommodation choices in 2025. “Your usual hotel in Manhattan might need a rethink, but don’t forget — location isn’t everything.

“Some of the best business hotels are just a short ride from the city centre, and they’re often better equipped for productive work,” she advised.

The good news about 2025

On a more optimistic note, Smith highlighted a promise from airlines for more seats in 2025 — an anticipated increase of 1.8% in the first half of the year, with 2.1% growth in Africa.

However, Smith cautioned against premature celebration: “More seats don’t automatically mean cheaper fares, especially with everyone eager to tie down those face-to-face meetings.”

Looking ahead, companies should keep an eye on new route announcements, which often come bundled with attractive corporate deals.

Now is also an opportune time for travel managers to strengthen relationships with airline representatives or collaborate with their Travel Management Corporation (TMC).

“The companies winning at the travel game aren’t necessarily the ones with the biggest budgets — they’re the ones being clever about how they spend it.”

Smith further emphasised the power of consolidated buying through a competent TMC, which can harness substantial negotiating power.

“We’re booking thousands of room nights and flights, which means better rates and more flexible terms for our clients,” she explained, illustrating the strategic advantage companies can gain.

In conclusion, success in 2025 will hinge not merely on managing costs but also on maximising value from every business trip.

Whether through meticulous planning, leveraging smart technology or enlisting the right support team, companies can achieve optimal results and better navigate the evolving landscape of corporate travel.