Despite looming recession fears, 2023 has witnessed a dramatic surge in first-class and business travel bookings. According to fresh data from Corporate Traveller, Australia’s foremost travel management firm for SMEs and a Flight Centre Travel Group division, economy travel has seen a sharp decline.
The revealing statistics emerge from a detailed comparison of flight seat preference data from the second half of 2022 (July-December) and the first half of 2023 (January-June). Corporate Traveller examined data across Economy, Premium Economy, Business, and First-Class bookings.
Astonishingly, the data unveiled that First-Class bookings have witnessed a stupendous growth of over 107%, while Business Class bookings rose by a solid 26%. Conversely, Premium Economy and Economy bookings dipped significantly by 41% and 20%, respectively.
This intriguing trend emerges amidst an atmosphere of financial instability and impending recession, with nearly half (46%) Australian business leaders predicting a recession in 20231. However, this stark increase in high-end travel bookings defies the recession predictions, presenting an image of resilience and growth within Australian businesses.
Tom Walley, Corporate Traveller’s Global Managing Director based in Australia, considers these unexpected results a positive indication for the SME sector, which forms the backbone of the Australian economy. Despite the ongoing economic fragility, these numbers hint at unexpected robustness in business travel.
Walley asserts, “First-Class bookings have doubled over the past year, and traditionally cheaper seats – Economy and Premium Economy – are in decline. This shift in travel preferences underlines that business travel remains a critical factor for SMEs, signifying that businesses are still willing and able to budget for luxury in their trips despite the economic uncertainties.”
Digging deeper, Corporate Traveller also disclosed seat selection data for the first half of 2022, post the reopening of international borders. The data painted a markedly different picture, with a significant leap in Economy and Premium Economy bookings, rising by 30% and 62%, respectively. In contrast, Business and First-Class bookings for business travel dipped by about a quarter (26% and 23%).
Reflecting on these fluctuations, Walley explains that this cautious spending behaviour could be attributed to businesses’ uncertainty as they resumed travel post-pandemic. This fear of last-minute cancellations made businesses more cautious in their seat selections.
However, in contrast to the earlier trend, the recent increase in First-Class bookings indicates how much the SME sector and the travel industry have recovered over the year. As suggested by the booking data, this resurgence in confidence provides an encouraging sign for the industry and economy as a whole, signalling a solid rebound in the face of adversity.
Written by: Anne Keam
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