Flight Centre forecasts four in 10 businesses will increase business travel in 2025 fiscal year

Local businesses consider corporate travel non-negotiable, with more than four in 10 looking to increase the amount of time employees spend in the sky over the coming year.

Corporate travel has become an essential expense for major businesses, despite the threat of a weakening economy. Picture: iStock

Corporate travel has become an essential expense for major businesses, with more than four in 10 planning to spend more on flights this financial year, despite the threat of a weakening economy.

Flight Centre’s Corporate State of the Market survey shows 40 per cent of businesses plan to increase their travel over the course of the 2025 fiscal year, while 42 per cent of customers intend to spend more on travel than last year.

Flight Centre corporate global chief operating officer Melissa Elf said business travel had become more critical to corporates, with many putting a greater emphasis on face-to-face meetings.

“Virtual meetings – aside from your usual catch-ups with team members – are now fading away into the distance as in-person meetings, events and conferences return to centre stage with increasing importance,” she told The Australian.

“Corporate travel is now, without question, deemed to be a non-discretionary spend for busi­nesses, as a critical facet to surviving and thriving across the globe.”

Ms Elf said increased demand in the coming year painted a positive picture for business travel and would create flow-on effects for a multitude of destinations as corporates continued the ­‘‘bleisure’’ trend of adding a holiday to the beginning or end of their trips.

“Bleisure remains a strong trend in the business travel world,” she said.

“I’ve experienced this first-hand in France in recent weeks, where companies used the Paris 2024 Games to meet possible new customers and used it as a great way to reconnect with current ­clients.”

Corporate travel has become an essential expense for major businesses, despite the threat of a weakening economy. Picture: iStock

Companies are also exploiting the trend as a way to attract and retain talent in a tight labour market across Australia.

Overall, 10 per cent of Flight Centre major clients intend to increase travel by more than 20 per cent, and 30 per cent were expected to increase travel by up to 20 per cent over the financial year.

Flight Centre’s corporate division counts Wesfarmers, Optus and Toyota as major clients.

As for intention to spend, 6 per cent of customers surveyed plan to spend more than 20 per cent more on their travel, 36 per cent intend to increase by up to 20 per cent, 31 per cent believe the amount spent will be similar to last year, and only 11 per cent anticipate reducing their travel spending.

Ms Elf said that small and medium enterprises were leading the travel push, with about half having plans to take more businesses trips.

“Interestingly, we’re seeing SMEs lead the charge, with around 46 per cent of small to medium companies having the intention to travel more in FY25, compared to 33 per cent of large market companies that intend to travel more during the same ­period,” she said.

The latest Bureau of Infrastructure and Transport Research Economics report for June showed that there were nearly 4.1 million seats made available on international scheduled operations to and from Australia during the month, compared to 4.6 million in the same period in 2019.

Ms Elf said Flight Centre’s FCM Travel and Corporate Travellers brands had seen strong customer retention and achieved some major milestone wins, which led to a year-on-year increase in corporate travel bookings of more than 5 per cent in FY24.

“In the past financial year, we observed clear indicators of a rise in the volume, expenditure and frequency of corporate travel, demonstrating that businesses across Australia regard it as an essential facet, rather than an optional one,” she said.

“We’re optimistic about the financial year ahead, as we continue to implement new technology and bring new customers on board, led by our people and our personal service, while our customers report that they intend to increase both their travel and their spend over the coming year.”

Shares in Flight Centre are up 1 per cent since the start of 2024 at $20.66.