Corporate travel on track to accelerate in coming months: FCM

FCM's optimistic outlook is driven by pent-up demand, growing momentum and adaption to the new norm

Just a few months into 2022, FCM is reporting a positive trajectory across its global operations, with client demand and bookings on the rise as more countries open their borders to international travellers once again.

This sentiment is shared by FCM’s parent company, the Flight Centre Travel Group (FLT), which predicts its corporate travel division is likely to return to profitability as early as March-April.

FCM’s optimistic outlook is driven by pent-up demand, growing momentum and adaption to the new norm

In a statement to the Australian Securities Exchange last week, the Group’s corporate business collectively rose more than 50 per cent above January levels at February mid-month. The company also revealed an escalation in activity in February as the world rebounded after Omicron.

These improvements were seen across all regions and followed almost 150 per cent total transaction value (TTV) growth in 1H2022 A$2 billion (US$700 million) compared to the previous corresponding period.

“After two years of lockdowns and restrictions, we are optimistic about the acceleration of FCM’s recovery and outlook. It is heartening to see the travel industry rebound in a meaningful way these past months as the world begins to reopen to international travellers once again,” said FCM global managing director, Marcus Eklund.

Looking ahead, while average spend is unlikely to return fully in the near-term, the company believes that the global rebound will gather pace throughout 2022 and bullishly predicts its corporate TTV can now pass peak FY19 (monthly) levels during the FY23, assuming market conditions improve. Average client spend (market recovery) is expected to reach 60-75 per cent of traditional levels as restrictions ease and as a result of pent-up demand for face-to-face meetings; as well as material TTV flowing through from the pipeline of accounts won during the past two years.

Eklund cites a number of factors in fuelling current demand.

“It’s clear that decisive government action to ease travel and testing requirements alongside the restoration of vital international air routes have been key enablers and accelerators driving business travel growth. When combined with virtual meetings fatigue and the pent-up desire to resume face-to-face connections, these have all played a part in driving growth,” said Eklund.

In Asia, FCM saw an average 17 per cent month-on-month growth in bookings for international travel from July to December which was primarily driven by the Vaccinated Travel Lanes in Singapore and the rebound in India. The number peaked in November before the arrival of Omicron. The last six months of 2021 has signalled a clear correlation between easing of restrictions and bookings for Asia, where consistency on both sides of the border having an immediate impact on demand has seen materialism into actual return to travel.

“Although bookings are trailing and markets continue to be challenged by restrictive policies particularly around international travel in Asia, we expect some pick-up on the horizon between March to June from markets such as Singapore, Malaysia and India whose restrictions are slowing easing. This confidence is also buoyed by notable surges in interest from companies and travellers in January and February despite Omicron, so we are optimistic for an accelerated pace of recovery in the coming months,” said Bertrand Saillet, managing director of FCM in Asia.

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