SOUTH AFRICA – New FCM report shows South African companies are increasing their travel spend in 2024, with flight expenses up 54%, as they prioritize face-to-face connections and market expansion despite rising costs.
The FCM Business Travel Barometer reveals a significant surge in corporate travel spending. Flight ticket volumes have grown by 54%, accompanied by higher average ticket prices. Despite these rising costs, businesses remain committed to travel as a core element of their strategy.
“This increase is a testament to the value businesses place on maintaining personal relationships and exploring growth opportunities,” said Bonnie Smith, General Manager of FCM. “Many understand that virtual meetings cannot replace the impact of in-person interactions.”
To adapt, companies are refining travel policies to manage costs effectively. Strategies include leveraging corporate deals and loyalty programs to offset higher expenses for flights, hotels, and ground transport.
The report also highlights evolving travel patterns. London Heathrow continues to dominate as the top international destination from Johannesburg, followed by Accra and Dubai. Within Africa, cities like Accra, Nairobi, and Lusaka are gaining prominence, reflecting growing intra-continental trade ties.
“Accra’s rise shows a clear shift in business focus toward African markets,” Smith explained. “There’s growing interest in strengthening regional connections and fostering trade relationships across the continent.”
Economic pressures have influenced travel class choices. Economy Class has seen the largest jump in ticket volumes, growing by 64%, while average prices increased only slightly. This demonstrates businesses’ focus on cost-effective travel, particularly for short-haul and regional routes.
Premium Economy, however, tells a different story. While ticket volumes rose modestly by 2.3%, fares have surged by over 100%. Smith noted that this trend reflects a preference for added comfort on strategic trips, where performance and well-being take precedence.
“Premium Economy strikes the right balance for long-haul travel,” Smith advised. “Although prices are higher, companies can negotiate better rates for key trips where efficiency is crucial.”
Hotel spending has risen by 66%, driven by increased bookings for long stays and higher-end accommodations. Meanwhile, car rentals are being used more frequently, with a 66% rise in bookings, even as daily rental costs have decreased slightly. This shift underscores the need for flexibility in regional travel.
As businesses plan for 2025, the importance of optimizing travel budgets without compromising quality is clear. Smith concluded, “South African companies are positioning themselves as key players in global and regional markets. Smart resource allocation and forward planning will ensure they achieve their objectives while managing costs effectively.”
The report builds on findings from FCM’s Q4 2023 Global Quarterly Trend Report, which forecasted a 3% rise in global travel costs, as well as a significant increase in travel capacity and demand for New Distribution Capability (NDC) in 2024.
This suggests that businesses are preparing for higher costs but are also identifying ways to navigate and plan for them efficiently.
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