U.S. Companies Trim Corporate Travel Budgets

Good morning from Skift. It’s Tuesday, August 30. Here’s what you need to know about the business of travel today.

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Episode Notes

Although corporate travel has made progress in its recovery in recent weeks, the sector is still struggling to hit pre-Covid metrics. And as travel costs continue to rise, U.S. companies are cutting budgets for business trips by nearly 25 percent, reports Corporate Travel Editor Matthew Parsons.

Corporate credit card platform Ramp, which compiled the data, attributes the reduction in business travel budgets to concerns about a recession. The company said in its latest transaction data report that companies will tighten spending in the future, with corporations already substantially cutting back on spending in areas such as advertising and software purchases. Ramp added that corporate finance teams are being asked to find ways to lower costs amidst economic turbulence.

The Global Business Travel Association projects annual global business travel spending to hit pre-pandemic marks in mid-2026. That’s 18 months longer than its previous estimate last year.

Next, Finnair has been hit hard in recent years by large-scale travel restrictions in East Asia and the closure of Russian airspace. But the carrier believes its new partnership with Qatar Airways will help it return to profitability, reports Edward Russell, editor of Airline Weekly, a Skift brand.

Finnair announced on Monday it’s partnering with Qatar Airways to launch new daily nonstop flights to Doha from Copenhagen, Helsinki, and Stockholm from November. Finnair does not currently serve Doha. Russell writes the pact appears to be part of a change in strategy for Finnair as prior to the pandemic, it had focused on connecting Europe and East Asia. Finnair’s partnership with Qatar Airways will enable the Nordic carrier to bypass East Asia on routes to Australia, a major market for Finnair.

Finnair CEO Topi Manner said the partnership would also create new routes to fly Nordic travelers to regions such as Africa and the Middle East. Russell notes many of those travelers would have previously thrown through an East Asia hub on Finnair or another airline.

Finally, business and real estate writer Nick Huber recently tweeted that Google will kill Airbnb because consumers would be able to avoid Airbnb’s substantial service charges. But Executive Editor Dennis Schaal writes that Google won’t in any way spell doom for the short-term rental giant.

Huber said, in a tweet that got a lot of traffic, hosts could save money with direct bookings by just putting links to their properties in Google listings. However, Schaal retorts that dozens of startups have learned consumers won’t discover companies simply because there’s a link on a Google business listing. Schaal notes it takes an enormous amount of resources to attract direct bookings.

Furthermore, Schaal writes property owners use Airbnb because it is a powerful brand in the travel industry, adding that direct hotel bookings haven’t killed Expedia or Booking.com.