A cooling corporate climate? Survey sees biz travel slowing

Travel Weekly

6 days ago

Citing the impact of tariffs, economic uncertainty and geopolitics, many corporate travel stakeholders are anticipating that business travel's rocky recovery is about to get worse.
New data from the Global Business Travel Association (GBTA) suggests the industry is anticipating a slowdown. The group's July outlook poll, which surveyed 950 corporate travel managers, suppliers, travel management companies and other stakeholders across 45 countries in mid-June, showed that optimism within the sector had plummeted from 67% in late 2024 to just 28% by this summer.
The deteriorating outlook was especially pronounced among suppliers: While 37% expected revenue drops in April, that figure had jumped to 48% in the latest survey. Hotel suppliers are especially pessimistic, with 58% anticipating revenue decreases averaging 17%.
Jan Freitag, senior vice president of lodging insights for STR and the national director of hospitality analytics for CoStar Group, pointed to recent STR hotel data supporting these concerns.
Jan Freitag
"If you look at the weekday U.S. occupancy percent change for the last four months, that has been negative," he said. "So, in March, April, May and June, weekday occupancy has declined compared to 2024. And that weekday occupancy softness is, to me, already a sign that all is not well in the business segment."
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The uncertainty stems largely from what Freitag described as the "tariff on-again, off-again, on-again, off-again" environment, which he said has infused uncertainty into the global macroeconomic picture, causing some companies to take a "wait-and-see approach" as it relates to corporate transient travel decisions.
He also noted that for the first six months of this year, group occupancy had declined.
Despite the headwinds, the GBTA's comprehensive Business Travel Index still projects global business travel spend will grow 7%, to $1.57 trillion, in 2025, though this represents a deceleration from previous forecasts.
Companies shift gears
TMCs are reporting similarly sluggish spending patterns.
At the GBTA's annual convention last week in Denver, Gabe Rizzi, president of the TMC Altour, said business is essentially flat year over year to date, which is well below the company's double-digit growth plan. Business with government contractors and some manufacturing sectors are down double digits, he added, and government IT sectors are off approximately 25%.
In light of the anemic corporate travel environment, Rizzi said the company is focusing sharply on new client recruitment, including working toward leveraging partnerships announced in April with Kayak for Business and Blockskye.
"Corporate travel is like a canary in the coal mine," Rizzi said. "Whenever there is uncertainty in the geopolitical sphere, everyone takes a wait-and-see approach."
American Express reported that travel and entertainment spending by its commercial customers grew just 1% year over year in the second quarter, down from 2% growth in the first quarter. The company attributed the slowdown to "softer airline and lodging spend."
Airlines, however, represented a bright spot amid the overall pessimism, with only 39% expecting revenue declines this year, according to the GBTA survey.
During Q2 earnings calls this month, Delta said corporate sales were up low single digits year over year in June, while United Airlines reported even stronger momentum. United CEO Scott Kirby said that while business demand "is not all the way back," demand "has certainly inflected in a positive direction."
Still, this optimism does not extend across all industries. Sectors with significant exposure to tariffs, such as car manufacturing, are likely to be "disproportionately impacted," Freitag said, and may decrease their corporate travel spend.
Suzanne Neufang
Suzanne Neufang, the GBTA's CEO, echoed that sentiment.
"Manufacturing, it goes without saying, I think is the most at risk because of the disruption that's happening," she said. "But we don't quite know which way it's going to go right now."
Visa worries
Beyond the tariff impact, U.S. government policy has been cited as a factor causing companies to increasingly modify their meetings strategies.
The GBTA poll shows rising numbers of organizations have canceled their U.S.-based meetings, relocated events outside the U.S. or shifted to virtual formats since April, with 20% of organizations reporting that they've canceled sending employees to U.S.-based events, up from 10% earlier this spring.
"And it wasn't just non-U.S. companies responding that way," Neufang said "It was also companies who are based in the U.S. who are changing their meeting locations, and that could be for visa reasons, because certain employee bases are still having a tough time getting visas to travel into the U.S., from a fast turnaround perspective."
The survey also found that one in five travel buyers globally said employees have declined U.S.-based business trips due to concerns related to U.S. government actions, and more than one-third of global respondents reported that they personally know someone whose travel has been affected by U.S. policy changes, up from 23% in April.
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Robert Silk contributed to this report.