Company spending on co-working spaces is on the up, while business travel is declining, according to corporate card and expense firm Ramp.
The clear winner is WeWork, but the report also pinpoints OpenAI, the maker of popular generative artificial intelligence (AI) chatbot ChatGPT, as another fast-growing budget winner.
The latest Spending Benchmarks report from Ramp, which has tracked patterns over the last quarter of 2022, covers $10 billion of aggregate annual spend across 13,000 of its customers.
Company travel and expense spend as a percentage of total transaction volume declined from October to December. The report also said in December that as a category, travel and expense, as well as lodging, both declined on the previous month — the first time they’ve done so in six months.
This could be due to companies tightening their belts due to economic uncertainty, but also because of mass layoffs in the tech sector.
Office spending jumped 5.7 percent in the last three months of the year, making it the fifth-fastest growing bucket of spend among top categories.
“The post-pandemic office is increasingly a co-working space,” said the report.
Spending with WeWork increased 90.7 percent in 2022, and consistently ranked as the second-largest office vendor throughout the year, behind Microsoft Store, it added.
“Businesses aren’t hiring, but offices are still making a comeback as organizations look for ways to drive employee productivity,” the report said.
Artificial intelligence also rears its head. “We predict hiring will remain muted in tech-oriented industries that are focused on enhancing profitability metrics,” said the report. “It will pick up in labor-intensive industries that are addressing supply chain issues and demand. Spending with AI research companies like OpenAI will grow as companies invest in tools that can help lean teams achieve more.”
Spending on OpenAI rocketed in December, and it’s likely that steep trajectory will continue as more sectors begin experimenting in the technology.
WeWork reports its fourth-quarter results on Thursday.