Internova Index Part I: The Demand for Business Travel
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One of the main findings is that the demand for business travel has remained flat year over year. Due to fluctuating global macroeconomic conditions, business travel has remained mostly flat from Q1 2024 to Q1 2025 across both domestic and international spend.
Demand for economy air has increased relative to premium classes, suggesting that businesses are still keen to travel but are being more cost-conscious. This insight is further supported by the decrease in hotel spend, which signifies that business travelers are shortening trips but not cancelling them. Higher demand for economy suggests that Road Warriors continue to travel, as companies still focus on new sales and servicing existing clients. This also indicates that the Road Warriors are enjoying the new airline focus on premium economy products.
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In a recent Global Business Travel Association, 34% of Travel Managers thought their travel spend would decrease while only 7% suggested it would increase. Company profits are expected to increase while revenues are somewhat flat forcing corporations to reduce expenses wherever possible.
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While economy air spending increased — up 10% YOY — premium economy leapt up 25%, much higher than the 3% bump in business/first class. This lower growth in business and higher growth in premium economy suggests that senior management is either trading down to save money or flying less to reduce discretionary spend. The move toward premium services is part of a broader industry effort to counteract rising operational costs, fluctuating fuel prices and economic uncertainty that Business Travelers are embracing. By focusing on high-margin premium seats, airlines aim to maximize revenue per passenger while offsetting the impact of reduced capacity and higher labor expenses.
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