In an uncertain economic landscape, corporate Australia has emerged as a beacon of resilience, boosting the nation’s economy with a sharp $6.9 billion increase in travel expenses over the past year. This bold move is revealed in the recent data from the globally recognized payments platform, Airwallex.

Airwallex’s report shows that total spending on business-related expenses rose by 9%, or $12.7 billion, year-on-year, totalling an impressive $152.8 billion between January and May 2023. Notably, businesses have, on average, shelled out an additional $54,816 on travel, marking a steep 71% rise compared to the corresponding period in 2022.

Amid the rising trend of remote work and economic flux, the data collected by Airwallex, offering a panoramic view of spending patterns across the economy, has revealed an unanticipated surge in business expenditure on travel.

The report, capturing expenditure between January and May of 2022 and 2023, highlights a few salient points:

• International travel agencies saw a spectacular 278% increase in corporate travel spending, amounting to $2.3 billion.
• Domestic flights and hotels experienced a significant uptick of 89% ($1.9 billion) and 60% ($770 million), respectively.
• International hotels and airlines also benefited from increased business spending, with respective rises of 57% ($930 million) and 19% ($263 million).

Laclan Millist

Speaking about the data, Lachlan Millist, Airwallex’s Director of Sales, emphasized the value that businesses place on face-to-face interactions. Despite the rise of more affordable virtual options, the data underscores that businesses view in-person meetings as integral to fostering relationships, networking, and scouting new commercial prospects.

In Millist’s words, “the increasing travel demand will bring opportunities for the sector to reinvest and re-emerge from the pandemic, stronger than before.” However, he also underlined that businesses seek more bang for travel expenses. He highlighted the potential benefit of partnering with the right fintech platform, like Airwallex, to access competitive foreign exchange rates, transparent and low fees, and real-time access to expenses.

The rise in travel expenses has not only impacted airlines and hotels. The surge is seen in all corners of the tourism industry, including Australian luggage retailer July. As an indicator of the robust resurgence of travel, July reported a staggering 640% revenue increase since 2021, with some months witnessing a 1,000% year-on-year growth.

“We’ve grown the team by 80% to meet demand,” said Richard Li, Co-Founder and CEO, July. Li welcomed the positive development for all businesses in the travel and tourism space, among the most brutal hit during the pandemic.

The news of this travel spending surge has encouraged July to extend its online global reach beyond Australia and New Zealand to the UK and the US, signalling a remarkable comeback from the pandemic downturn and painting a hopeful picture for corporate Australia’s economic future.

Written by: My Thanh Pham

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