Airfare Costs Are Up, But Companies Aren't Cutting Meetings

With travel prices growing at more than twice the rate of inflation, most companies are still maintaining their off-site meetings — for now.

April’s airline fares were up 20.7% from the year prior, driven by a sharp increase in fuel costs, according to a new report from the Bureau of Labor Statistics. Overall, U.S. travel costs are up 7.8% from last year, according to the U.S. Travel Association’s Travel Price Index. The annual rate has now more than doubled in two months, from 1.1% in February to 7.8% in April — the largest increase since the post-pandemic rebound in 2022.

There’s no end in sight, as the Iran war drags on. Delta Air Lines CEO Ed Bastian said last week on the TODAY show that passengers should expect to pay more to fly, especially during the peak summer travel season, if the company continues to face rising operating costs.

Business Travel Could Suffer

It’s still early to judge the impact on corporate meetings for the remainder of the year, said Etherio CEO Eric Altschul. “Our near-term unease is for conferences where the individual, rather than a corporate host, is paying for travel. This means that association and franchise meetings are the most likely to be impacted in the short term.”

“Most companies are not reducing the number of meetings, but they are managing budgets with greater discipline,” said Mikael Ek, managing director of EMEA, at BCD Meetings & Events. “We’re seeing shorter programs, earlier booking, tighter attendee controls, and increased use of local or secondary-city destinations. Many are also consolidating smaller meetings and prioritizing preferred suppliers and spend visibility.”

Confidence among business travel professionals has plunged, according to a sentiment poll by the Global Business Travel Association (GBTA), falling from 59% in January to 41% by April. CEO Suzanne Neufang noted the industry is still expected to reach $2 trillion by 2030, despite fewer trips. 

Business travel is at a cost inflection point, said SAP Concur General Manager and Chief Product Officer Fred Fredericks last week in a LinkedIn post.

The key is in locking down the air as far in advance of the trip or meeting dates as possible to get the best rates, said Richelle Suver, managing director, One10.

“We provide re-cost estimates during the planning phases if we see fares trending higher. This allows companies to prepare for what the actual budget fluctuation may amount to.”

However, the pressure on planners continues to mount. A new survey of 300 meeting professionals and 1,000 meeting/conference attendees from the U.S. found that nearly two-thirds of planners (63%) consider travel expenses to be their primary obstacle for 2026. A full 58% expressed concern over the ability to “ensure the financial success of a meeting in the current environment.”

There does not appear to be a rush to take meetings virtual, for now. Diane Drey, senior director, travel services at ITA Group, reports that her clients are adjusting their budgets to accommodate the price increases, rather than moving meetings to online.

Is Incentive Travel Immune?

Some companies are unwilling to absorb additional airfare costs and are rethinking their choices of incentive destinations based on more affordable airfare. But for the most part, they continue to travel internationally.

 “These macro-economic factors will always be a part of this business,” said Suver. “The impact and ROI of programs outweighs rising airfares.”

If the price increases continue, they could reach their tipping point, but most incentive programs are contracted a year out.

For now, Jay Klein, CEO at M-Plus Global Events, says his clients are taking a wait-and-see stance on next year’s incentive programs.

If they choose to move international trips back to the U.S., he says the winners would be the warm weather destinations like Florida, Texas, and California.

“Some may also move from European destinations to Mexico or the Caribbean, which haven’t been hit as hard on flights. We also think some clients will opt for more, regional programs where more people can drive or have shorter/less expensive flights.”