Emburse Business Travel Snapshot 2025

2025 Outlook: Stabilization Meets Strategic Opportunity

Based on data insights ending April 2025, the business travel market continues to evolve, presenting both challenges and new opportunities for strategic travel managers. In the hotel sector, average corporate negotiated hotel rates (booked rates) stand at $209, reflecting a modest year-over-year increase of 1.4%, just $3 higher than the previous year. Despite this uptick, opportunities for cost containment remain strong, with the average hotel discount rate (the difference between market and booked rates) holding steady at 20.9%.

Geographically, rate shifts vary. New York and Boston have seen booked hotel rate increases of 3% and 6% respectively, while Bengaluru’s booked rates remained unchanged. However, market rates tell a more dynamic story. Bengaluru is up 11%, while Seattle has seen a 9% decline. Volume trends further illustrate this rebound: cities like New York (21%), Boston (23%), and Bengaluru (39%) are experiencing significant surges in travel activity, signaling a robust return to business travel.

On the air travel front, prices are stabilizing. While modest increases are expected, the real advantage lies in strategic engagement with New Distribution Capability (NDC) channels. Airlines like United have already shown measurable cost benefits via NDC, and recent shifts in American Airlines' distribution strategy have created a more competitive environment. This gives buyers additional leverage to renegotiate contracts and improve discount structures.

Taken together, despite forecasted price escalations in both hotel and airfare categories, the 2025 business travel market offers enhanced savings opportunities for organizations that approach supplier negotiations with data-backed agility and strategic foresight.

Shifting Gears: Corporate Travel Ramps Up in a New Era of Cost and Opportunity

Business Travel Accelerates in 2025 Amid Shifting Economic and Technological Forces

As we move through 2025, business travel activity continues to accelerate: New data from GBTA suggests that nearly half of travel buyers (48%) are expecting to take more business trips than in 2024, and 57% anticipate increased spending. This builds on a strong rebound in 2024, when the majority of buyers reported increased bookings (71%) and spending (77%) compared to 2023.

While overall optimism is high, companies remain mindful of budget pressures and are taking a more selective, value-driven approach to travel. Travel managers must navigate a complex and shifting landscape shaped by ongoing technological transformation, geopolitical uncertainties, and increasing sustainability demands.

In the hotel sector, stabilization is the dominant trend. Annualized growth is projected to remain below 4%, suggesting more predictable pricing compared to previous years. Meanwhile, airfares are also stabilizing, though modest increases are still anticipated. Despite this, securing favorable terms remains challenging, as airlines continue prioritizing yield management strategies over traditional discounting.

Regional sentiment reveals that optimism is strongest in the APAC region, where 63% of buyers expect increased spending in 2025. North America follows at 57%, while European buyers remain more conservative in their forecasts.

The air travel landscape is particularly dynamic. Changes in airline distribution strategies, notably American Airlines’ vulnerability following its reversal of aggressive NDC enforcement, have created a competitive environment that buyers can leverage during contract negotiations. With United Airlines delivering an average of 11% savings through NDC channels, adopting these channels is becoming a critical strategy. Travel managers and finance teams must be agile and proactive, using data and new technology to secure advantageous rates and maximize program value.

Market Review: Hotel

The hotel market is showing signs of stabilization post-pandemic recovery, transitioning into a more balanced mix of business and group travel. Annualized growth is expected to settle below 4% in 2025, signaling a maturing recovery phase and more predictable rate behavior.

Overall Rate Trends

The 30-day rolling average market rate is currently $264, while the average booked rate for corporate travelers is $209, marking a modest year-over-year increase of 1.4%, or $3. The average hotel discount rate stands at 20.9%, offering buyers a valuable opportunity to optimize spend through strategic negotiation.

Regional Pricing Trends

North America (NA)

Cities show a varied picture. Boston, MA, saw a 6% increase in booked rates, while Seattle, WA, and Houston, TX, followed with 3% increases. Washington, D.C., and Arlington, VA, saw booked rate declines of 4%, and Scottsdale, AZ, experienced a more substantial 7% decrease.

Europe, the Middle East, and Africa (EMEA)

London, ENG, experienced a 5% increase in booked rates. Basel, SWI, and Stockholm, SWE, saw strong increases of 13% and 7%, respectively. In contrast, Dublin, IRL, declined by 3%, and Barcelona, ESP, experienced a significant 9% decrease.

Asia-Pacific (APAC)

Bengaluru, KA’s booked rate remained flat with no year-over-year change. Modest gains were recorded in Singapore (+1%) and Shenzhen (+2%), while decreases were observed in Shanghai (-3%), Hong Kong (-8%), and Riyadh (-5%).

Rate Increases and Decreases

Among the top cities by booking volume, Boston (+6%) and London (+5%) recorded notable booked rate increases. Looking more broadly, Basel (+13%) and Copenhagen (+12%) were among the highest climbers.

On the other end of the spectrum, cities like Barcelona (-9%), New Orleans (-8%), Scottsdale (-7%), and Fort Worth (-7%) showed the most pronounced booked rate declines, creating substantial grounds for contract renegotiation.

Segment Observations

While the analysis did not explicitly capture chain-level data, industry reporting indicates that the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector performed well in 2024 and is anticipated to continue growing into 2025. This trend suggests additional group-related volume may influence rate negotiations and property availability.

These pricing dynamics indicate that travel buyers should target negotiations in cities experiencing rate decreases or modest gains and capitalize on the sustained hotel discount rate to drive savings.

Market Review: Air

The global air travel landscape is showing signs of stabilization, with only modest airfare increases expected in the coming year. Business travel volumes are projected to exceed pre-pandemic levels in 2025, reflecting a full recovery for the sector. At the same time, demand for leisure travel is expected to cool, which may lead to increased capacity and more favorable conditions for corporate rate negotiations.

Despite this, travel managers should anticipate challenges in securing favorable terms as airlines continue shifting toward revenue optimization strategies that rely on yield management rather than broad discounting. However, the recent strategic reversal by American Airlines offers a timely window for renegotiation and improved discount structures.

Average Market vs. Negotiated Airfare (12-month average ending May 2025)

Looking at the latest fare data, the 12-month average ending May 2025 reveals that the overall market fare is $724, while the average negotiated fare is $602. For domestic economy travel, the average market fare is $459, and the average negotiated fare is $406. Notably, 93% of domestic bookings benefit from negotiated rates. For international economy travel, the average market fare is $710, and the negotiated fare is $646, with 59% of bookings taking advantage of negotiated pricing.

Visual Suggestion:

• Line Chart: Illustrate "Average Market vs. Average Negotiated Fares Over Time" for both overall trends and separate domestic and international economic trends.

Year-over-Year (YoY) Change in Fares

In terms of year-over-year change, the average market fare decreased slightly from $725 to $724, while the average negotiated fare dropped more significantly by 4.6%, from $631 to $602. Although these averages suggest relative stability, earlier forecasts from November 2024 predicted notable fare increases due to airline capacity constraints and operational cost inflation. Travel managers should therefore continue to monitor market conditions closely and prepare budgets accordingly.

Percent Discount Gap Between Market and Negotiated Fares

The overall discount gap between market and negotiated fares for the 12 months ending in May 2025 is approximately 16.9%, calculated from an average market fare of $724 versus a negotiated fare of $602. This gap has widened compared to the previous 12-month period ending May 2024, which showed a discount gap of approximately 13.0% (calculated from $725 market vs. $631 negotiated).In terms of program savings by category, domestic economy flights generated average savings of 12%, while international economy flights achieved 13% in program savings.

Breakdown of Domestic vs. International Fare Trends

International fares remain significantly higher than domestic ones. Furthermore, the application of negotiated rates is much more successful for domestic bookings (93%) than international fares (59%). Booking behavior remains relatively consistent, with travelers booking domestic economy flights an average of 17.4 days in advance and international flights 19.8 days in advance.

NDC adoption has increased dramatically, with ARC-settled NDC transactions growing from 5.6% in April 2022 to 19.3% in April 2024. United Airlines has delivered substantial value through NDC, offering an average savings of 11% per booking—or about $25—during Q3 2024. Of these bookings, 84.6% were refundable, and the savings were nearly evenly split between domestic (47%) and international (53%) routes. In contrast, American Airlines' NDC fares offered almost no savings, averaging just $2 per booking, and none of these fares were refundable.

Among domestic NDC bookings, Delta provided a 23% average savings compared to Global Distribution System (GDS) fares, while American Airlines delivered a more modest 9% savings. Unrestricted (refundable) fares are substantially lower through NDC channels, averaging $1,317 compared to $3,185 via GDS—a difference of 59%. For restricted (non-refundable) fares, the price difference is smaller, with NDC bookings averaging $476 versus $522 in GDS, a 9% reduction.

NDC Savings by Refundability (Domestic)

Given the shifting landscape, travel managers are encouraged to collaborate with TMCs that offer robust NDC integration and actively monitor fare types, refundability, and channel performance. These steps will be essential to unlocking savings and increasing traveler flexibility as traditional discounting becomes less reliable.

Advice for Finance Teams

To optimize 2025 business travel programs, focus on strategic cost management and proactive engagement with market changes.

To effectively navigate the nuanced and recovering business travel landscape in 2025, travel managers and finance teams must adopt strategic negotiation approaches, leverage technology, and adapt policies. The current market presents unique opportunities for savings, particularly in air travel, despite general stabilization trends and modest price increases.

Budget for Price Fluctuations and Strategic Savings

Some forecasts anticipate a modest increase in airfares, such as a projected 5.4% rise in negotiated fares for 2025 based on trends from November 2023 to November 2024. Hotel rates are similarly expected to increase by 4.5%. However, the latest 12-month data ending in May 2025 tells a more nuanced story for air travel: average market fares have stabilized at approximately $724, and negotiated fares have actually declined by 4.6% year-over-year to $602. This trend, combined with a widening hotel discount rate (22.6%) and an air discount gap of approximately 16.9%, means strategic buyers have enhanced opportunities for cost mitigation despite overall market volatility. Therefore, prepare your travel budgets to accommodate these fluctuations while actively seeking negotiation opportunities.

Leverage American Airlines' Vulnerability for Renegotiation

American Airlines' recent reversal of its direct distribution strategy resulted in a $1.5 billion revenue loss and a 40% drop in corporate travel agency bookings in 2024, making them vulnerable and actively seeking to regain market share. This creates a strong bargaining position for buyers to review and renegotiate airline agreements now, as competing carriers are also likely to offer better discounts to prevent churn.

Prioritize New Distribution Capability (NDC) Channels

NDC channels are expected to offer the most substantial discounts in 2025 as airlines actively shift away from traditional GDS toward direct booking options. Actively monitor direct booking channels and select Travel Management Companies (TMCs) that offer comprehensive NDC integration across their platforms to access the best available rates and content. For example, United Airlines delivered impressive NDC savings averaging 11% or approximately $25 per booking, with a substantial 84.6% of fares being refundable. In contrast, American Airlines' NDC offerings in Q3 2024 showed negligible savings (nearly 0% or $2 per booking) and no refundability.

Optimize Hotel Negotiations: Focus on the Rate (Not Amenities)

Hotels are increasingly offering guests the option to forgo specific amenities or services, such as parking or breakfast, in exchange for lower rates. We recommend leveraging this cost-saving opportunity in your negotiations with hotels. Given the current softening in leisure travel demand, aim to secure discounts between 20% and 23% during contract negotiations.

Target Cities with Hotel Rate Decreases for Favorable Terms

While major cities like Chicago (12%), London (12%), and Toronto (14%) have seen substantial increases in hotel rates, markets such as Scottsdale (-11%), Barcelona (-9%), and Boston (-4%) have experienced significant hotel rate decreases. Concentrate negotiation efforts in these declining markets, where hoteliers may be more receptive to favorable terms and conditions, thereby minimizing travel spending.

Embrace Technology and Data-Driven Decisions

The influence of artificial intelligence (AI) in corporate travel is growing, even if adoption is currently slow (only 34% of buyers plan significant AI integration in 2025). AI will empower corporate buyers to mine travel and expense data to predict volumes, per diems, and acceptable rates, leading to potential cost reductions and greater efficiency.

Additionally, as corporate travel policies become more flexible, allowing direct bookings with suppliers can significantly boost traveler satisfaction (up to 25%) and potentially reduce costs by eliminating agency fees and accessing exclusive online rates. Seek new technologies that can help capture these direct bookings for duty of care and analytics.

Looking Ahead to 2026: Top 5 Trends

Insights from the GBTA Business Travel Outlook Poll (February 2025) have highlighted several key areas that will shape business travel into 2026. Let’s take a closer look.

Increased Travel Volume and Spending

Travel buyers widely anticipate an increase in both the number of business trips and total spending in 2025 compared to 2024. Specifically, 48% expect more trips (with 6% expecting significantly more) and 57% expect higher spending (with 6% expecting significantly higher). This indicates a strong return to travel activity, though rising costs are a significant concern.

• Implications for Travel Managers: Budgeting needs to account for increased volume and potentially higher per-trip costs. With more trips expected and overall spend on the rise, travel managers should re-evaluate existing budgets, revisit supplier contracts, and reinforce policy compliance. Proactive forecasting and category planning will be essential to avoid overspending while still accommodating increased demand.

Adoption of New Distribution Capability (NDC)

Approximately 48% of travel buyers plan to adopt NDC or increase NDC bookings in their program in 2025. Airlines are increasingly shifting towards NDC channels for content and potentially offering substantial discounts there. However, some buyers cite dissatisfaction with TMCs' ability to handle NDC bookings as a reason for evaluating their TMC.

• Implications for Travel Managers: Accessing potentially better content and pricing requires NDC integration. Travel managers should audit their current TMCs’ NDC capabilities and ensure access to the full range of airline content, including exclusive fares. Training staff on NDC workflows and tracking NDC adoption rates will be critical for maximizing value and traveler satisfaction.

Application of Artificial Intelligence (AI)

Around one-third (34%) of buyers plan to apply AI within their travel program in significant ways in 2025. AI is already being used by suppliers to optimize pricing and is expected to be leveraged by buyers to analyze data, predict volumes, and set acceptable rates. This shift could lead to greater rate fluctuations and increased reliance on technology for program management.

• Implications for Travel Managers: Understanding how AI influences pricing is key to negotiation. AI tools can help identify patterns in booking behavior, forecast spend, and flag policy exceptions in real time – especially when travel and expense management are delivered through a unified, global experience. Integrating AI into reporting dashboards and approval flows can drive greater visibility and allow managers to fine-tune policies dynamically.

Focus on Sustainable Business Travel Practices

Thirty-six percent of buyers are planning to implement a sustainable practice element into their travel program in 2025, with 33% anticipating increased investment in planet-focused sustainable practices. This indicates a growing corporate commitment to reducing the environmental footprint of business travel.

• Implications for Travel Managers: Policies and preferred supplier choices may need to align with sustainability goals. Managers should consider sourcing from eco-certified hotels and airlines with strong emissions reporting. Establishing carbon budgets, tracking Scope 3 emissions, and including sustainability metrics in quarterly reviews will support broader ESG goals.

Evolving Workforce and Remote Work Policies

While hybrid work remains common (59% across all respondents), one-third (32%) report their companies made work-from-home policies stricter in the past year. This impacts the type of travel, with sales/account management (27%), internal meetings (14%), and external conferences (14%) expected to be the main drivers of spend in 2025. At the same time, the return-to-office movement is creating a growing mismatch between organizational policies and workforce expectations. According to the February 2025 GBTA report, 47% of supplier and TMC respondents indicated that the incoming workforce prefers roles with remote or flexible work options. As more travel industry employers enforce stricter in-office mandates, they may face increasing hiring barriers, particularly among younger professionals who prioritize flexibility and work-life balance.The growing demand for remote roles is making it harder for suppliers and TMCs to attract talent, especially younger professionals seeking flexibility. This talent gap can impact service levels, innovation, and overall support, all of which affect corporate travel programs. Travel managers should factor in workforce sustainability when evaluating suppliers and service agreements.

• Implications for Travel Managers: Trip purpose needs may shift based on evolving remote work mandates. Managers should adapt travel policies to reflect new patterns, such as more travel for internal collaboration or cross-regional team meetings. Encouraging flexibility, supporting bleisure options, and emphasizing duty of care can help meet the expectations of a hybrid workforce.