Travel budgets and business travel will increase again in 2024, pending economic conditions and geopolitical issues, according to the Global Quarterly Trend Report from FCM, the travel management company. The study, which covers the third quarter of 2023, said the demand for travel continues to increase across the world. And while the growth has leveled off just a bit since the rapid surge in travel that took place in late 2021, according to the report, the overall costs of airline tickets, hotels and cars seem to have stabilized of late.

In the US, the business travel demand has been especially evident, according to the report, based on passenger load factors (PLF), which measure the percentage of an airline’s available seating capacity that has been filled. Reported by IATA, the global PLF continues to rise, and is now at 84.6% for the quarter. The domestic PLF is 83.5%, with the US leading all major markets at 84.5%. The international PLF is 85.4%, led by North America, the highest-performing region, at 87.7%.

Ashley Gutermuth, director of FCM Consulting, Americas, said, “With an increased focus on travel budgets for next year, we continue to work with many businesses throughout the industry to develop new ways of managing costs.”

In terms of seat capacity, the final global forecast for 2023 is a decrease of 2.2%, compared with 2019. However, the forecast for the first quarter of 2024 is that there will be 5.3% more seats (up 71.8 million) compared with the same period in 2019. The regional forecast in North America is expected to be a bit higher, with an increase of 8% for the first quarter of 2024.

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On the accommodations side, hotel occupancy levels averaged 68% per month in 2023. Furthermore, corporate average room rates (ARR) have plateaued over the past six months, signaling a return to rate stability. In North America, the ARR decreased $10 (down 4%) in 2023 from the second quarter to the third quarter. New York and Chicago saw some of the biggest rate drops in the US during that period, 6% and 3% respectively.

The report also analyzed the car rental market and the global average daily rate (ADR),for that segment ncreased by 4% in 2023 versus 2022. The global ADR forecast for 2024 is that rate increases will stabilize to an increase of 2% to 3% in 2024. With an ADR of $66 in 2023, the US is one of the few major markets that had a rate decline (down 1%) this year.