Key Corporate Travel Trends 2022-2023; Rise of Takaful Travel Insurance

Corporate travel remains an important aspect of businesses in Malaysia despite the advancements and introduction of new-age technology such as virtual meetings and work-from-home culture.

It remains a crucial aspect of businesses in Malaysia with corporate travel expenditure reaching USD45 Billion (RM202.5 Billion) in 2019 alone. The sheer importance of corporate travel is reflected in the number of Malaysian traveling abroad for businesses which accounts for 55% of overall corporate travel spending, inbound travelers account for 34%, and domestic at 11%. Corporate travel is expected to grow rapidly in 2023 as the demand for face-to-face meetings increases and the economy recovers after 2 years of COVID lockdown.

The following insights combine publicly available curated data and analysis combine with insights from industry experts. This will help your company benchmark against the standard industry standard.

Although video meetings and teleconferencing have also become alternatives during the pandemic, with 31% of employees stating that remote setups are just as effective as business travel according to Forbes, 41% of corporate companies cite the reason for their travel is to attend client meetings.

22% of corporate companies travel to attend internal meetings especially MNCs and international presence. 22% of corporate travel is to attend conferences and trade shows with many countries opening their borders in 2022.?

On the frequency of business travel, 43% of businesses travel once or twice a month indicating a clear road to recovery of the corporate travel segment. 29% of corporate travel once every 2 months.

The top industry that is driving corporate travel is the technological sector representing 31% of corporate travel followed by GLCs and MNCs at 21% and 18% respectively. This indicates that large corporate still dominate the recovery of corporate travel with the 3 sectors representing close to 70% of overall corporate travel.

One factor which affects the decision to travel is the airfare. Corporate travel airfares fell 12% in 2020 with ticket prices further falling to an all-time low of 35% in 2021. 2022 saw many countries opening their borders and a sudden rush for international travel albeit a 5% and 12% rise in Q1 2022 and Q2 2022 respectively. The rise in demand and the rise in fuel price drove the airfares further up by 25% in Q3. Prices are expected to rise by 9% in 2023 fueled by more countries opening up their borders.?

The rise in Takaful travel insurance demand

One distinct trend that was observed in 2022 and will continue to 2023 is the rise in demand for takaful-based travel insurance. This is in line with many companies' policies to focus on Islamic Finance, especially amongst GLCs and MNCs in Malaysia.?

25% of corporate companies are currently using Travel takaful insurance for their employees' corporate travel against 35% currently using conventional travel insurance. 37% of corporate companies indicate that they are moving towards Takaful travel insurance in 2023 signaling a rise in Takaful-based travel insurance.?

Read more: Islamic Finance As A Tool For Economic Recovery Post Covid-19

Methodology

The insights combine publicly available curated data and analysis combine with insights from industry experts. Polls were conducted among participants representing travel companies and other business travel industry professionals including travel buyers and travel suppliers across various sectors from Nov 1-20, 2022. A total of 5543 responses were received.

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*Faeez is an entrepreneur, board member, advisor as well as mentor specializing in Islamic Finance and investments, corporate structure, and digital transformation. Faeez was named 30 under 30 by Forbes magazine in 2016, 40 Under 40 by Prestige, Top 10 Young Entrepreneur Rising by Top 10, People To Watch 2016 by TTG as well as the Most Innovative Young Leaders Award 2016 by UCSI.?