The 2025 Outlook

Cost will be top of mind moving into the year ahead – as it so often is – but 2025 will also come with a sharpened focus on the traveller experience and on the climate impact of business travel.

Right now, RFP activity is rife as corporate travel buyers seek to optimise their programmes with new technology while also ensuring service levels remain up to par. This balancing act will persist into 2025 as the delivery of New Distribution Capability (NDC) content continues to evolve and as buyers weigh up the tech savvy of new entrants in the travel management arena against the know-how of legacy players.

The proposed $570 million acquisition of CWT by American Express Global Business Travel will likely have a ripple effect across the sector. The deal is currently being investigated by the UK’s Competition and Markets Authority, but, regardless of the outcome, more M&A activity is expected in 2025.

Inflationary pressure will continue to affect pricing in 2025, but the rate of growth is expected to ‘normalise’, according to CWT forecasts. Average air fares are expected to increase by between 0.1 per cent and 0.6 per cent globally, while a moderate increase of between 1.9 per cent and 2.9 per cent is forecast for average daily room rates. Car rental costs are also expected to increase slightly, with pricing highly influenced by local supply and demand factors (see below for all the details).

Geopolitical tensions and climate concerns will likely drive-up business travel budgets – Morgan Stanley predicts corporate travel budgets will increase by roughly 6 per cent year-on-year in 2025 – but these factors may also negatively affect travel volumes. Amid ongoing conflicts in Ukraine and the Middle East, the incoming Trump administration could also make business travel in and out of the US increasingly complicated.

Meanwhile, new EU climate laws such as the Corporate Sustainability Reporting Directive (CSRD), will push a greater number of corporates to opt for lower-carbon travel choices, such as rail, and to rework policies that encourage travellers to consider virtual meetings or take fewer but longer trips, a trend that was already taking shape in 2024.

Revisiting the 2024 Outlook

Looking back at our 2024 Outlook published in December last year, pricing and demand forecasts, as well as the predicted push to reduce business travel’s carbon footprint, were all on point.

GBTA’s Catherine Logan cautioned the rebound in travel spend in 2024 would require “a delicate balancing act between demand, cost management, the distinct needs of the business traveller, and environmental, social, and governance concerns”. Trainline Partner Solutions general manager Andrew Cruttenden also pointed to the need for improved access to rail content, while Amadeus Cytric Solutions SVP commercial, Arlene Coyle, said greater transparency and clarity around CO2 emissions reporting will be needed to secure C-level buy-in. However, no one anticipated the backlash against supplier greenwashing that was spurred on by the EU’s Green Claims Directive and the ‘landmark’ case against Dutch airline KLM.

Other contributors highlighted the potential of AI to drive efficiencies in travel management. TripStax chief technology officer Scott Wylie predicted investment in Generative AI, would “really take off in 2024” and, in fact, several companies are currently piloting AI integrations within their travel programmes. This looks set to continue in 2025.

Meanwhile, Concur Travel’s Amy Padgett anticipated increased friction between employees and employers regarding flexibility and hybrid working, and indeed, several multinational corporations this year launched return-to-office mandates. Some TMCs, however, have maintained a flexible work environment.

None of last year’s contributors predicted the level of industry consolidation that took place in 2024 – or the impact this might have on service levels, client retention and loyalty.

Read on to find out what our contributors believe is coming our way in 2025, followed by a round-up of key industry price forecasts for the year ahead.