European business travel trends: what they are and how to optimise your programme to benefit

Business travel spend is expected to exceed pre-pandemic levels by 2025, underscoring the value of travelling to maintain in-person connections with customers, suppliers, and colleagues. 

At the same time, many companies are keeping a close eye on travel spend — or looking for ways to reduce it. While a company’s travel spend is partly determined by market rates, businesses can maintain some control over their outlay by influencing traveller choices and implementing effective policies.

We recently analysed booking patterns from Navan customers in Europe and detailed how companies can use the learnings to optimise their travel programmes in the region, broken down by travel type. Here’s what we found.

Air travel trends

• In the post-pandemic years, airfare prices increased due to fewer flight options and higher oil prices, before stabilising in 2023. Navan data shows that the average spent on a flight booking in Europe increased year-on-year by 40% in 2022, but decreased by 17% in 2023 as the air industry recovered and oil prices stabilised.
• Recent years have seen the ongoing fragmentation of airfare distribution, as many airlines, like Air France-KLM, withdraw certain fares from traditional distribution channels. Others, such as Lufthansa Group, have progressed further and only offer domestic content via NDC or direct connections.
• This move to NDC is a trend that isn’t set to stop, and companies that miss out on access to these fares could pay a high price.

How to optimise air spend

• Ensure your company policy is robust, with easy-to-follow guidelines around cabin class, carrier, booking lead time, distance, and the policies surrounding these variables. For best results, build your company’s travel policy directly into the booking tool, so travellers know exactly what is in and out of policy when booking a trip.
• Collaborate with TMCs that have established extensive NDC connections and acquire a large portion of airfares from NDC sources, which represent a potential savings opportunity of up to 12%, depending on the airline. Navan customers currently have access to 12 NDC connections in Europe, with airlines including British Airways, Lufthansa Group, Air France-KLM, Finnair, and American Airlines — and more are on the way. 

Train travel trends

• In 2022, the price of train tickets increased in most European countries. The UK’s highest train fare increase in nine years occurred in 2022. Prices also increased in 2023 by up to 6% and then again by 5% in 2024. And at the beginning of 2023, ticket prices for high-speed trains in France became 5% more expensive.
• A 2023 survey conducted by GBTA on behalf of FREENOW found that half of European businesses increased their spending on rail travel, and more than three-quarters of employees surveyed stated that rail is their preferred mode of travel.
• Navan has seen a growing appetite for train travel. In France, where new legislation prohibits domestic air travel on routes that would take less than 2.5 hours by train, rail bookings increased 28% in 2023 compared to 2022 from a pre-COVID cohort of Europe-based customers.
• The EU’s liberalisation of the rail network, designed to enhance overall service reliability and keep ticket prices competitive, is paying off. Average train fares between Madrid and Barcelona, one of Europe’s busiest business travel routes, dropped 43%, and ticket sales quadrupled following the entry of two new train operators: OUIGO in 2021 and Iryo in 2022.

How to optimise rail spend

• Make sure your travellers have access to a large inventory of rail fares to help ensure they can book the most relevant fares at the best possible prices. Navan customers get access to many of the continent’s leading rail providers, including SNCF, OUIGO, Trenitalia, Renfe, and Eurostar.
• Choose a booking platform that empowers travellers to choose the most suitable journey option, for example by giving them visibility into journey time, cost, and the carbon emissions associated with their chosen transport mode. Navan’s rail alternative pop-up lets travellers know when there’s a viable rail alternative during a flight search so they can make more informed decisions.

Hotel spend trends

• After dropping considerably during the pandemic, hotel average daily rates (ADRs) in Europe were 50% higher in the summer of 2023 compared to the same period in 2019, a result of high inflation, which raised the cost of running hotels and the cost of constructing new ones, as well as a significant increase in demand.
• Average spending per hotel booking increased by 20% in 2022 compared to 2021.
• Business travellers spent 9% less on hotels in 2023 compared to 2022, which can be partly explained by the drop in average total room nights by 6 percentage points over this period.

How to optimise hotel spend

• Use your booking data to better understand your company’s travel patterns and secure cost-saving negotiated rates with hotels.
• Take advantage of technology-driven incentive programmes to reduce company travel costs. Navan, for example, rewards travellers and travel bookers when they book more cost-effective hotels that save their company money. These rewards are fully funded by Navan, so your company and its travellers get the full benefits. In 2023, the average nightly booking price for hotels booked with Navan Rewards in the UK was 16% cheaper than without Navan Rewards, while companies enrolled in Navan Rewards saw an increase of up to 19% in platform adoption.

Read the full report for more in-depth insights on travel trends, and how to use them to optimise your travel programme.