Two years after release from pandemic restrictions, the freedom to travel has finally unleashed pent-up demand. Leisure traffic is up and flights are frequently full1. However, it’s not just vacationers filling the seats. Business travel is growing too.
Demand…
Not only is there high demand for travel; there is high demand for premium seating on planes. This is described in more in more detail2 by Daniella Genovese writing for Fox Business; reasons include the willingness to spend more, as people make up for vacations missed during the pandemic. Virgin Atlantic report, for example, that 2023 first quarter demand for premium and Upper Class cabins is 50% more than in the same period in 2019.
High demand is accompanied by high prices, including seasonal variations. 2023’s spring break saw fares up3 by anything from 10% to 30% and US air fares in February were 6.3% up on January prices. Data4 from the U.S. government shows a 17.7% increase in airfares from March 2022 to March 2023.
…and Supply
Much of this increase is related to the price of jet fuel, but physical supply also plays a part. During the pandemic airlines cut capacity and shed staff, in some cases shrinking operations by up to 80%. Carriers have struggled to re-instate capacity fast enough. More passengers compete for fewer seats.
Here’s what’s unusual: demand remains high despite higher prices and inflation. Businesses have remembered the power of in-person negotiations. Anyone who’s stepped off a plane into a meeting knows that the quality and comfort of your flight can influence the outcome. So, in concrete terms, business travellers are competing with the leisure sector for premium seats.
Credit Unions and Banks have an opportunity.
It sounds obvious, but those credit unions and banks which make their travelling customers’ lives easier, will do well. Travel money is a good example of how. If your customers can book travel money online, and collect it in-branch at their convenience, that’s a significant barrier overcome.
Essiell’s white label travel money service, Money 4 Travel, enables exactly that. Its secure cloud based software is compatible with existing systems and it delivers a seamless process for all parties. Customers find it easy; credit unions and banks can use its convenience to enhance their offering, growing their customer base in turn. It’s a simple way to take the stress out of travel and grow business at the same time.
2 Virgin Atlantic exec says premium travel is booming
4 U.S. Bureau of Labor Statistics’ Consumer Price Index, April, for March 2023.
