Tourism

Travel expenses by UAE employees soar 286%

August 3, 2022

Flight, check. Hotel, check. Hospitality, check. Taxis, check. Business expenses add up

Rocketing fuel prices add to costs
Face-to-face meetings on the rise following pandemic

UAE employees are filing soaring business expenses on the back of spiking energy prices.

Average total monthly travel reimbursement costs have risen 286 percent year-on-year in 2022, according to research by Bayzat, a UAE-based employee benefits platform.

At the same time, the average amount spent per travel request rose 66 percent year-on-year.

With UAE fuel prices up 60 percent in the last year, Bayzat found that fuel reimbursements for staff were up by 38 percent year-on-year in the last six months.

Rising fuel bills, combined with a resurgence in travel and face-to-face meetings, has meant that total average monthly travel expenses for UAE employees are 18 percent above what they were pre-pandemic in 2019.

Sachin Gadoya, co-founder of UAE-based Musafir Business, a business travel management app, said there has been a gradual rise in demand for corporate travel, driven by increased traveller confidence, a preference for personal interactions with clients, and the easing of entry restrictions in many destinations.

“Musafir Business estimates corporate travel demand to grow in 2022, bouncing back to 85 percent of pre-pandemic levels,” Gadoya told AGBI.

He added companies were still taking a “conservative approach” to travel, limiting overseas business trips to an average of one to three days.

Riyadh, London, New York, San Francisco, and Mumbai were seen as the most popular locations for corporate travellers.

For in-bound travellers coming to the UAE, Gadoya said the key markets were India, France, USA, Egypt, Pakistan, Germany, UK, Russia and China. There has also been an increase in preference for hotels that offer PCR testing services.

Spending has fluctuated, according to Bayzat, which found that September 2021 travel expenses were 260 percent above the yearly average, while in 2022 June they were 95 percent above the yearly average.

One of the busiest routes in the world is London-Dubai. Last month AGBI reported that flight bookings in July and August have surged eight percent above pre-pandemic levels.

The latest data from the International Air Transport Association found that in May, total passenger traffic was up 83.1 percent year-on-year, with international travel up 325.8 percent. For Middle Eastern airlines, traffic rose 317.2 year-on-year in May.

Despite the triple digit yearly growth, there is still some way to go before travel is back to pre-pandemic levels.

The latest outlook report by Airports Council International found that while the Middle East and South Asia have recovered, they are currently operating at around 85 percent of Q2 2019 seat capacity.

Tim Clark, the president of Dubai’s Emirates airline, said last month that the airline industry would return to equilibrium in 2023, adding that the sector must “tough it out” until then, and learn to manage rising fuel costs and staff shortages.

For the time being, it seems employees travelling for business and those who sign off on their expenses will have to tough out higher costs as well.