Corporate travel buyers, now coping with sky-high airfares and hotel rates, the continuing threat of inflation, unresolved supply and demand issues, and geopolitics, are bracing for a difficult 2023.

New hotel RFP rates, according to one buyer in the finance sector, are 10 per cent higher, airfares have increased while corporate discounts have been reduced.

For instance, several hotel rates in Europe have jumped from 300 euros (US$300) to 900 euros due to revenge travel, the buyer shared.

He also cited the Singapore-Shanghai business class airfare increasing to S$5,000 (US$3,536), and flying to New York now costs S$15,000.

“Our approach to the higher costs is if the budget is there, we cannot be too strict with policies. Our trip limits 
have gone up a bit to retain employees to help build back the business,” he pointed out.

A CTM in the pharmaceutical sector said since restrictions were lifted, corporate travel has rebounded with “lots of business development” taking place.

Similarly, the CTM also noted that “prices have gone through the roof”, but if an employee has to travel, he will still travel if the budget is there.

However, it was up to a traveller’s “personal consideration regarding a destination” to go on a business trip or not.

According to another CTM in the pharmaceutical sector, the travel budget not consumed in the last two years allowed “travel (to happen) as per normal this year when borders opened”.

She continued: “But we have to tighten up in 2023 as the business outlook is not very optimistic. Business is still recovering and next year’s travel budget, which we are working on now, will dictate how much staff can travel.

“The company is conservative and with the possibility of a drop in sales due to a patent loss, the budget for next year will be flat at best,” she shared.

Benson Tang, executive director, corporate travel, Informa Markets (IM), also believes there would be a recession in 2023.

IM’s convention and exhibition events in the region, he said, have been affected due to lower buyer demand caused by strained US-China political and trade ties, and China’s Covid-19 policy.

Tang, who is also executive director of Corporate Travel Community, said profitability depended on the revival of corporate travel and the ability of buyers, in particular those from China, to attend events and tradeshows around the world.

He cited the cancellation of an aviation event in Shanghai, which moved to Doha due to China’s Covid-19 rules, and noted that “premiums for underwriting events are expensive and there are many exclusion clauses”.

Earlier this year, IM also announced the temporary relocation of its Jewellery and Gem World (JGW) from Hong Kong to Singapore due to the former’s border restrictions.

Despite the relocation, Tang shared that many China-based buyers are still unable to attend JGW, which is taking place September 27-30 at the Singapore Expo.