The cost of out-of-office work is rising, but better planning is possible – and helpful
With business class fares jumping and flights packed, travel managers are facing tough conversations about rising costs. The data tells two stories. Yes, travel is getting more expensive, but it’s also becoming more predictable.
Travel managers who book ahead are saving on airfares and getting better hotel rates. The opportunity to be strategic with travel spend has never been greater.
Remember those ghost-town airports of 2020? Those days are long gone. Flights are packed to the rafters with an 86.2% load factor recorded. Global passenger demand was up 8.6% in August 2024 compared to 2023. Business class tickets are costing between 6 and 8% more compared to 2023, but there’s some good news – economy fares have dropped by between 1 and 4% versus 2023.
What does this mean in 2025? If you’ve been putting off booking important client meetings in London, New York or Dubai, now’s the time to get them in the diary. Those ‘last-minute-Larry’ days are behind us – the early bird really does get the window seat (and the better fare) now.
If you’re wondering why your hotel bills in Joburg are looking a bit steeper lately, you’re not alone. Room rates are up 14%, and if you think that’s eye-watering, spare a thought for colleagues heading to New York, where they’re looking at US$490 a night (up 15%). The average room rate is up in North America (6.8%), South America (25.4%) and Europe (5.3%), with a gentle softening of prices in Middle East/Africa, Asia and Australia.
What does this mean in 2025? It’s time to get savvy with those accommodation choices. Your usual hotel in Manhattan might need a rethink but remember – location isn’t everything. Some of the best business hotels are just a short ride from the city centre and they’re often better equipped for productive work.
Combine and Win
It gets more interesting for international business plans. Spots like Brazil and India are still seeing prices climb, even as the rand is working harder in some markets than others.
Think strategically about where and when you’re sending your teams. If you’re planning business expansions, factor in these regional cost differences. Sometimes it’s worth bundling several meetings in one trip – your budget will thank you.
Airlines are promising more seats for 2025 (1.8% more in the first half of the year and 2.1% more in Africa), but don’t break out the champagne just yet. More seats don’t automatically mean cheaper fares, especially with everyone eager to tie down those face-to-face meetings.
What does this mean in 2025? Keep an eye on new route announcements – they often come with decent corporate deals. And if you’re managing a travel programme, now’s the time to really get to know your airline reps or work with your travel management company (TMC). Those efforts and relationships can be worth their weight in air miles.
The companies winning at the travel game aren’t necessarily the ones with the biggest budgets – they’re the ones being clever about how they spend it.
Text | Bonnie Smith
Photography | PeopleImages.com – Yuri A
Bonnie Smith is General Manager of FCM South Africa.
For more information, go to www.fcmtravel.co.za.
