I feel this resurgence of blended travel stems partly from another – actually new – concept called “revenge” travel. This trend is defined by the boom in leisure travel, especially overseas, brought about by the pent-up demand for travel because people could not get out during the pandemic. There is no denying that leisure travel has exploded as hotel and airfares have skyrocketed, especially during the summer months. We have seen hotel prices steadily increasing with much higher occupancy levels back in 2022 (evident in our 2023 hotel RFPs). However, if you need to travel for business in a city which has a lot of tourism, be prepared to see significant increases to your average daily rate.
Airlines have been quietly preparing for this boom in leisure travel for some time. American Airlines, who released their NDC channel content in April of this year, is the first to come to mind. In Q3 of 2022, they hinted at changes coming to corporate travel, setting the stage for the impacts we are seeing this year. In Q4, they began promoting their upcoming NDC capabilities, with changes like bundling ancillary offerings or by offering discounted fares through their website.
Initially, travel managers weren’t sure what to expect. Then in early 2023, it became clear American’s focus was no longer on corporate travel. Contracts weren’t renewed, account managers were furloughed, and full content could only be received through their website or certain GDS models with additional fees passed on from the travel management companies. I must admit the GDS models are antiquated and changes were desperately needed; I had just hoped that it would not come at such a steep price for our corporate travel programs.
I’m not trying to call out American Airlines. However, I cannot help but feel that, with revenge travel in full swing, this timing was not coincidental. In the past, corporate travelers were booking a large percentage of business and first class tickets. Now airlines are seeing leisure travelers willing to pay these prices while corporate travel still hasn’t fully recovered from 2019. As travelers are fighting for seats for both leisure and business travel, it’s no surprise that the prices are insanely high. It appears that the new strategy that’s being adopted by American and other airlines is paying off – at least for now.
This brings me back to why there are so many conversations about bleisure travel today – affordability! Many people saved money for years to travel to a great international destination as the prices for meals, air, hotel, ground transportation, and souvenirs are traditionally pricier in tourist locations. With today’s increased demand, airlines and hotels are raising their prices because people will pay for it, which makes these trips much less affordable. All of this, combined with revenge travel, allows many travel suppliers to make profits they haven’t seen since before the pandemic. It makes perfect sense to take advantage of having your company partially subsidizing your vacation by paying for your flight and ground transportation.
As inflation continues to grow and revenge travel eventually slows down, I am confident that pricing fatigue will set in, resulting in people having to save their money for day-to-day essentials. If history has taught us anything, these trends are cyclical – business travel will eventually return to growth trends that were interrupted in 2019 and leisure travel will shift back to more typical levels, possibly more regionally based.
Here’s the question I pose: When the airlines and hotels eventually realize the great relationship with corporate travel they disregarded and desperately want it back, how can they make us love them again?
