Business travel demand bounce back hits full throttle as 2024 sees seat capacity soar

27 November 2023 – Airline seat capacity is set to soar in the new year. For the first quarter of 2024 there is forecast to be +71.8 million (+5.3 per cent) more seats (both domestically and internationally) than 2019, for the same period. That’s according to world-leading corporate travel management company, FCM’s latest Global Quarterly Trends report.

Africa leads the way with a predicted increase of 14 per cent, followed by Middle East (up 11 per cent), Latin America (eight per cent increase), North America (up eight per cent), Asia (seven per cent rise), Australasia (flat), and Europe down two per cent.

The report also showed that while travel demand was growing and positive, the increases have moderated for the third quarter in a row indicating a return to typical, seasonal demand compared to the rapid growth seen in 2021.

FCM New Zealand General Manager, Kelly Thomas explains that one of the biggest impediments to recovery so far has been the lack of airline capacity and competition, but things are improving.

“With airline capacity set to grow and in parallel, demand stabilise – the corporate travel landscape is set to return to relative normalcy in 2024. “

This is good news for Kiwis as it is likely to result in more competitive airfares across the board.”

When it comes to accommodation, hotel occupancy levels averaged 68^ per cent per month in 2023, globally. Over the past six months corporate average room rates (ARR) have plateaued, signalling rate stability.

YTD-2023* ARR in North America was NZD$414, Australia/New Zealand NZD$265, Europe NZD$321, Asia NZD$286, Middle East/Africa NZD$365, and Latin America NZD$212.

Thomas says though small rate rises from accommodation providers aren’t out of the picture for 2024, companies that partner with FCM for travel management will be able to counter rises by making positive travel program shifts.

“Our FCM team will sit down with their clients to change options to keep within budget, without compromising quality. For example - consolidating suppliers for leverage, reviewing hotel policy rate caps, utilising some of the newer hotels that have opened across New Zealand and the world, plus other adjustments.”

In terms of car hire, the overall global average daily rate (ADR) has increased by four per cent YTD**- 2023 versus 2022. The ADR forecast is rate increases will stabilise to +2-3 per cent in 2024.

Kelly Thomas believes that overall, this new data will come as welcome news for Kiwi businesses. “Plenty of New Zealand businesses are already looking at their travel programs for 2024 and the costs associated. This report indicates more price stability for the new year, which will certainly help with financial forecasts.”

We hope New Zealand entities feel encouraged by this latest report and more inclined to take their travel programs to the next level – meeting with potential stakeholders around the world, planning large-scale conferences and trading both domestically and internationally.”