Corporate airfares fell in the first half of 2025 despite growing demand for travel, while hotel rates rose significantly across most regions, according to FCM Consulting’s latest Insights report published by Business Travel News.
Drawing on booking data from FCM Travel and Flight Centre Travel Group, the report showed that average business-class fares declined 4 per cent year over year between January and May, while economy fares dropped 3 per cent. This came despite a 5.8 per cent rise in global demand. Analysts explained that actual bookings fell short of earlier forecasts, prompting airlines to cut fares to stimulate sales and maintain seat occupancy.
North America emerged as a weak spot, with corporate travel demand stagnating under pressure from U.S. trade policies and wider economic challenges. The report warned that higher inflation and slower economic growth could further dampen demand from both businesses and consumers. Airlines with large international networks may also face increased operating costs due to retaliatory tariffs and the risk of escalating trade conflicts.
While airlines moved to reduce fares, hotels pushed prices upward. The global average corporate hotel rate rose to $201 in the first half of 2025, up 19 per cent from a year earlier. North America led the surge, with average rates climbing $46 to $281. Chicago posted the sharpest increase at 39 per cent, followed by New York with 29 per cent.
Europe also recorded double-digit gains. Average rates there rose $31 to $211, led by Dublin with a 55 per cent spike, Madrid at 23 per cent and London at 19 per cent. The report linked the increases to the revival of business events and stronger international demand, though it cautioned that sustaining such growth may be difficult next year if occupancy levels soften.
In other regions, trends were mixed. Latin America’s average corporate rate rose $15 year over year to $165, while the Middle East and Africa climbed $29 to $226. Asia saw only a marginal decline of $1 to $170, and Australia/New Zealand recorded a $9 drop to $142, reflecting weaker market conditions.
The findings point to diverging cost dynamics in global business travel: airlines are lowering fares to drive bookings amid uneven demand, while hotels are capitalizing on higher occupancy and robust event-driven demand to raise prices. Looking ahead, FCM Consulting noted that inflation, trade tensions and the ability of hotels to sustain high occupancy will be key factors shaping airfare and hotel rate trends through 2026.
