The Business Travel Outlook for 2025: What Travel Managers Need to Know

As a Travel Manager, you’re always looking ahead, balancing cost control with ensuring your travelers have a smooth experience. If you’ve been hoping for relief from rising travel costs, 2025 might not be your year.

Experts across the industry agree: prices are expected to continue climbing modestly in all of the key categories–airfare, hotels, and car rentals. Here’s what you need to know to prepare your program and make the most of your travel budget.

Modest Increases in Airfare, Hotels, and Car Rentals

According to data from CWT and Business Travel News, here’s the breakdown:

• Airfare: Global ticket prices are projected to rise by just 0.6% in 2025. In North America, growth will slow even further to 0.5%, while Asia-Pacific and Europe see slightly higher increases of 1.6% and 1.4%, respectively.
• Hotels: Room rates are forecast to climb by 2.6% globally. In North America, average daily rates will rise to $187, up 2.2% from 2024. Upscale properties are expected to hold firm on rates, while midscale and economy options might offer opportunities for savings.
• Car Rentals: Prices in North America are expected to grow by just 1.3% in 2025. This is the slowest increase among travel categories, making ground transportation a potential bright spot for budget-conscious programs.

What’s Driving These Trends?

Several factors are shaping the pricing environment for 2025:

• Not a shock that airlines are facing higher labor and fuel costs, geopolitical challenges in places like Ukraine and the Middle East, and supply chain constraints. They’re keeping a tight hold on capacity to maintain profitability - true to form.
• Hotels are leveraging strong yield-management strategies, prioritizing higher margins over occupancy. Corporate travel remains a reliable segment, but leisure travel’s slight cooldown might open doors for negotiation.
• Car Rental Companies have stabilized fleets post-pandemic, but inflation and operational costs are still influencing rates. Public transit and rideshare are gaining traction in some regions.

Strategies for Travel Managers

So, how can you manage rising costs while keeping your travelers happy? Here are a few tips:

1. Leverage Strong Partnerships: Collaborate with airlines, hotels, and car rental providers to secure the best rates and added value. How AmTrav helps: With our established supplier relationships, we negotiate competitive rates and perks tailored to your program's needs. Plus, a2b (our booking tool) consolidates all your travel options in one place for easy management.
2. Consider Alternative Options: For hotels, look at broader brand portfolios or explore opportunities to “trade down” without sacrificing traveler satisfaction. For car rentals, evaluate whether switching suppliers or incorporating electric vehicles could offer savings. How AmTrav helps: a2b provides real-time access to many options, making it simple to compare and contrast alternatives that balance cost and traveler preferences.
3. Optimize Booking Policies: Encourage travelers to book early and within policy to lock in lower rates. Use tools that provide transparency and real-time pricing to avoid surprises. How AmTrav helps: With a2b, travelers can easily find and book within policy while you maintain full visibility and control. Automated notifications and reporting tools ensure compliance without extra effort.
4. Monitor Trends and Stay Flexible: Keep an eye on pricing changes and be ready to act when a supplier makes a competitive move. Flexibility can help you capitalize on unexpected opportunities. How AmTrav helps: Our booking tool provides actionable insights with realtime data on your booking trends and pricing fluctuations.
5. Emphasize Value Over Cost: Show stakeholders the broader impact of business travel—from employee satisfaction to client relationship-building. Use KPIs that reflect the strategic importance of travel to your organization. How AmTrav helps: Our reporting tools offer a clear picture of travel program performance, helping you display ROI and align travel with your organization’s priorities.

Looking Ahead

While the pace of price increases is slowing in travel, the reality is that costs will likely continue to rise. The key for travel managers/decision makers like you is to stay proactive: build strong supplier relationships, explore creative cost-saving measures, and focus on delivering value to your organization. By taking a thoughtful, strategic approach, you can navigate the cost increases of 2025 while ensuring your travelers remain productive and satisfied.