Business travel has rebounded much stronger this year than most aviation industry analysts predicted in the midst of the coronavirus pandemic. And domestic travel in the fall is back nearly two-thirds of 2019 levels. However, a new headwind appears to have emerged in recent weeks as companies cut spending amid a slowing economy. Henry Hartveld, an airline industry analyst at Atmosphere Research, noted that in recent weeks corporate travel managers told him that companies have begun to ban non-essential business travel and increase the number of executives needed to approve essential employee travel. In addition, he predicts that corporate travel will decrease slightly towards the end of the year and may remain limited in the first quarter of 2023. In addition, Mr. Hartveld noted that the discussions he led think that business travel “will fall below the levels that airline executives predict in their third-quarter revenue estimates.”

They estimate that business travel will decline towards the end of the year and may remain limited during the first quarter of 2023.

Almost a month ago, airlines were optimistic in their profitability forecasts. Specifically, Delta Airlines said that 90% of its corporate customers “expect their trips to stay the same or increase” in the fourth quarter. United Airlines also said its strong third-quarter results indicated “a robust trend in air travel demand that fully offsets any countervailing economic pressures.” The approach of the hotel groups has also been very positive. Christopher Nacetta, president and chief executive officer of the Hilton hotels chain, notes that overall occupancy reached 73% or more in the third quarter, while business travel in particular was very dynamic. However, a change in sentiment was seen as the economy slowed more noticeably. In particular, high-tech groups have announced significant and massive layoffs. In addition, mortgage banks have cut staff as rising interest rates hurt their business.

It is worth noting that the travel industry has long relied on business travel for both stability and profitability. In addition, businesses were willing to spend more than tourists. As the post-pandemic economy reopened, companies realized that face-to-face meetings served a purpose. In a recent survey by the Global Business Travel Association, which brings together business travel and travel service companies, corporate travel managers estimated that their employers’ business travel volume in their home countries has risen to 63% from pre-pandemic levels and international business travel was 50% of these levels.