In the midst of the pandemic and the widespread shutdown of the hospitality industry, travelers sought out safer-feeling, more personalized accommodations, driving a record $34 billion in FY2021 revenue for short-term rental company Airbnb. However, a new Deloitte report shows that in spite of the newfound popularity for alternative accommodations, businesses appear to lack interest in booking them for corporate stays.
The report, titled “Reshaping the Landscape: Corporate Travel in 2022 and Beyond,” showed a significant preference for traditional big hotel chains built into the corporate booking ecosystem, with only 9% of surveyed companies having non-hotel lodging as part of their tools, and 49% of companies refusing to reimburse employees for non-hotel lodging. Rewards programs play a powerful role in the corporate preference for hotels, as does the standardization of product.
“When people go on business trips, yes it can be fun and exciting, and there’s a team dinner at night, but at the same time people view it as a cost to their personal life,” said Mike Daher, Deloitte’s Head of Transport, Hospitality, and Services sector. “I’m away from my family, or my dog, or home, so I want points, and I want to use those points for my leisure travel. It’s a way to get compensated for their personal time, and points are a powerful part of the business traveler choice.”
The new report goes on to warn travel managers to be prepared for the impact of growing inflation. With jet fuel prices rising 30% in the past month, transatlantic flights are expected to be a particular pain point for companies that have not yet budgeted inflationary pricing into travel. The ending of the pandemic may also influence “irrational” pricing, as lodgings operators attempt to make up for past revenue shortfalls.
Despite higher prices looming on the horizon, the report predicts that corporate travel will see steady, but not extraordinary, growth in 2022. Costs do not appear to be putting a damper on planning for the return of large-scale company conferences either, with the widespread availability of a COVID-19 vaccine increasing the confidence of travelers and airline workers alike.