Business travel has partially recovered from pandemic lows but hasn’t returned to pre-2020 patterns or costs. Understanding the new normal for corporate travel helps businesses optimize travel policies and budget realistically for ongoing travel requirements.

Domestic business travel within Australia and New Zealand has recovered more completely than international travel. Regional sales territories, client meetings, and operational site visits all require face-to-face presence that video conferencing can’t entirely replace. However, the frequency and duration of domestic travel has declined as businesses learned to accomplish some objectives remotely.

International travel for business remains well below 2019 levels for most organizations. The combination of video conferencing effectiveness, travel cost increases, and sustainability concerns has permanently reduced international business travel demand. Companies are being much more selective about which meetings and activities justify international trips versus virtual alternatives.

Airfare costs increased substantially through 2024-2025 as airlines reduced capacity while demand recovered. Business class fares in particular show sharp increases, forcing many organizations to tighten travel policies around class of service entitlements. The cheap last-minute business fares that were common pre-pandemic are largely gone, requiring more advance booking to control costs.

Hotel costs in major business centers have also increased significantly, driven by broader inflation, labor shortages in hospitality, and reduced business travel creating less competition for corporate bookings. The corporate negotiated rates that travel managers previously secured are less advantageous compared to consumer booking channels than historically.

Travel policy tightening is widespread across organizations seeking to control costs. Approval requirements for travel, restrictions on travel class, limits on trip duration, and expectations around combining trips to minimize travel frequency all feature in updated travel policies. This creates tension with employees who view reduced travel perks as diminished benefits.

The sustainability agenda is influencing travel policies as organizations work to reduce carbon footprints. Some companies require carbon offset purchases for flights, others restrict or discourage travel based on emissions impact, and a few have explicit travel reduction targets linked to climate commitments. This creates additional complexity in travel decision-making beyond just cost and business necessity.

Travel management companies and corporate booking tools are regaining relevance after some organizations moved to more decentralized booking during pandemic. Centralized booking provides better data for expense management and compliance monitoring, though it may sacrifice some flexibility and occasionally price competitiveness compared to individuals booking directly.

The trans-Tasman travel corridor between Australia and New Zealand sees strong business travel demand given the integrated nature of many cross-border operations. However, airfares for Australian-NZ routes remain elevated relative to distance, creating ongoing cost pressure for businesses with regular trans-Tasman travel requirements.

Loyalty programs and corporate travel rewards have changed significantly as airlines adjusted program structures and devalued points. Business travelers who previously earned valuable personal benefits from corporate travel find loyalty programs less rewarding, reducing one of the psychological benefits that offset travel’s inconveniences.

Bleisure travel—combining business and leisure—is becoming more common as employees seek to extract personal value from business trip disruption. Organizations are navigating how to handle requests to extend business trips for personal time, who pays for incremental accommodation, and how this affects travel insurance and duty of care obligations.

Travel insurance and health requirements add complexity and cost compared to pre-pandemic travel. While vaccination requirements have largely dropped, health documentation, travel insurance specifically covering pandemic-related disruptions, and evolving entry requirements create ongoing administrative burden.

Meeting and conference attendance decisions are becoming more considered, with organizations questioning whether in-person attendance justifies travel costs versus virtual participation options. Conference organizers offering hybrid formats help, though virtual participation typically delivers substantially less networking and engagement value than in-person attendance.

Sales team travel remains relatively protected in most travel budget discussions given the direct link to revenue generation. However, even sales organizations are being more deliberate about travel allocation, using data on meeting conversion rates and deal outcomes to optimize where travel delivers returns.

Executive travel faces particular scrutiny around optics and sustainability, with senior leaders reducing travel or accepting greater inconvenience to align with organizational messaging around cost consciousness and environmental responsibility. The days of executives routinely traveling business or first class while organizations preach austerity are increasingly difficult to justify.

Regional variations in travel patterns reflect different market structures. Australian businesses with operations spanning Perth to Brisbane face enormous distances requiring air travel that New Zealand businesses serving smaller geography can often accomplish with ground transportation. This creates different travel cost structures for comparable organizations.

The rise of remote and distributed work models affects business travel patterns significantly. Companies with fully distributed workforces actually require more travel for team connection and culture building compared to traditional office-based organizations. Annual or quarterly team gatherings become essential for maintaining cohesion, creating discrete travel cost events rather than ongoing travel expenses.

Duty of care obligations when employees travel have become more prominent following pandemic travel disruptions and ongoing concerns around health, safety, and geopolitical risks. Organizations need robust processes for tracking traveling employees, providing support when issues arise, and evacuating staff from problem locations if necessary.

Expense management and compliance remains ongoing challenge with business travel. Mobile expense reporting and corporate card integration improve efficiency, but reconciling expenses, ensuring policy compliance, and preventing fraud require continuing attention. The organizations with cleanest expense processes are those that’ve invested in systems and clear policies rather than relying on trust and manual review. The Team400 team has worked with several firms implementing AI-powered expense automation to reduce processing costs.

Looking at 2026 budgets, businesses should plan for travel costs remaining elevated relative to historical levels. Airfares, accommodation, meals, and ground transportation all cost more than pre-pandemic. The organizations controlling travel costs most effectively are those being selective about travel necessity, booking in advance to secure better rates, and using data to understand what travel actually delivers business outcomes.

The question businesses should regularly revisit is whether specific travel is genuinely necessary or whether it’s happening because of historical patterns and organizational culture that assumes travel equals commitment or seriousness. The pandemic forced wholesale shift to virtual interaction, proving much can be accomplished remotely. Maintaining some of that discipline prevents unnecessary travel while preserving travel for activities that genuinely benefit from face-to-face interaction.

Business travel will remain important for relationship building, complex negotiations, site inspections, and team development. But the blanket assumption that business relationships require frequent in-person interaction has been challenged. The organizations finding the right balance deliver better outcomes than those that either eliminate travel entirely or return to pre-pandemic travel patterns without critical assessment.