Industry Update
External Article10 August 2021

Why is vacation so expensive? Blame business travel (or lack of it)

How business travelers impact leisure travelers, and the potential silver lining

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As travel returns, you might start feeling some airfare sticker shock. It’s not necessarily because more people are vacationing again, though they certainly are. It’s more likely because fewer people are doing trips for business. And when business travelers don’t travel, leisure travel can get more expensive. It may seem counterintuitive, but these premium-paying travelers generally help subsidize leisure travel.


The impact of business travel on leisure travel

There are two key areas where leisure travelers and airlines feel the absence of business travel.

Revenue: Business travelers spend more

While leisure travelers seek out basic economy airfares for cheap Las Vegas getaways or jump on deals for trips still a year out, business travelers typically buy at the last minute and spend significantly more. And it’s not even necessarily because they’re more likely to fly first-class. According to an analysis of International Air Transport Association data by American Express AXP, -0.34% Global Business Travel, business travelers spend more for the same economy seats than their vacationing counterparts.

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