As 2024 set the stage for major advancements in travel and expense (T&E) management, 2025 promises to accelerate these trends. Artificial intelligence (AI) is now a driving force in the industry, with predictive analytics enhancing spend management and streamlining both travel and expense reporting. Additionally, shifts within the travel industry have led to travel management company (TMC) consolidation, a trend that will likely continue into 2025. Here’s a closer look at what to expect in the coming year.
1. Slowing Inflation Boosts Travel Opportunities
Inflation peaked in 2023, causing a rise in T&E expenses and reducing the number of trips companies took in 2024. However, as inflation slows in 2025, companies are poised to make the most of flat T&E budgets. Business leaders expect that maintaining spending at 2024 levels will stretch further in 2025, increasing travel opportunities. At the same time, AI is revolutionizing travel management, allowing finance teams to update their T&E policies for a more streamlined process. In 2025, managers will ask key questions: Will every expense report need approval? Can AI automate travel expense reviews? The focus will be on cutting the time spent navigating T&E tools, with AI taking on more manual tasks.
2. AI Skepticism Remains but Trust Will Grow
Generative AI has gained massive adoption across various industries, and the travel sector is no exception. According to the 2024 Global Business Travel Survey, 95% of business travelers are open to using AI-powered automation. However, despite the rapid advancement of AI, many travelers remain cautious in fully trusting AI for booking travel or managing expenses. Throughout 2025, AI will serve more as a “helpful assistant,” offering recommendations and identifying anomalies in expenses. Travel providers should seize this opportunity to build trust in AI systems. Companies that focus on delivering AI tools with clear value and enhanced user experience will be well-positioned as user confidence grows.
3. Increased Expectations for User Experience
In 2025, travelers—especially business travelers—will demand richer, more responsive user experiences. Basic websites will no longer suffice. The focus will be on seamless, dynamic interfaces that offer continuous updates, particularly during travel disruptions like extreme weather events. Real-time information and problem-solving capabilities will be at the forefront of traveler needs, with an emphasis on duty of care.
4. Finance Leaders to Drive AI Adoption in T&E
Finance departments will play a key role in shaping the future of T&E in 2025. With a return to office policies and an increase in business travel, the collaboration between finance, IT, and security will be more important than ever. AI will also take center stage, as finance teams invest in AI tools that drive efficiency, security, and compliance. In addition, financial decision-makers will focus on the return on investment (ROI) of AI technology. Beyond cost savings, AI will be evaluated based on improved compliance, enhanced security, and positive user experiences. Expect companies to increasingly integrate travel, expense, and enterprise resource planning (ERP) solutions for a more seamless T&E experience.
5. TMC Consolidation and NDC Adoption
TMC consolidation, which began in 2024, will continue into 2025, leading to more powerful TMCs. With greater transaction volume, these TMCs will need to spread their costs while investing heavily in AI to enhance operations. AI-powered tools, such as large language models (LLMs) for reading fare rules or responding to customer inquiries, will begin delivering tangible results in 2025. The adoption of New Distribution Capability (NDC) will further benefit airlines and travelers alike. By the end of 2025, airlines will reap the rewards of NDC with improved personalization, bundling, and continuous pricing models, along with increased savings. More companies will also realize the benefits of fully integrated travel, expense, and ERP solutions, further streamlining operations and driving efficiency across departments.
6. Hybrid Work Continues but Travel Preferences Shift
Hybrid work environments will remain a major trend in 2025. While companies encourage more employees to return to offices, the frequency of blended work and leisure trips may decrease. However, with millennial increasingly occupying decision-making roles, companies that prioritize travel flexibility and employee well-being will continue to offer travel benefits that cater to a modern workforce.
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