German companies are increasing their focus on travel within Europe during a period of geopolitical “uncertainty” and budgetary pressures, according to the latest research from German business travel association VDR.
VDR’s annual Business Travel Analysis, now in its 24th year, surveyed around 800 travel managers at Germany-based organisations and found that while the number of business trips increased year-on-year in 2025, the average cost per trip was down compared to previous years.
Claudia Unger, VDR’s head of topics and network, said during a webinar that business travel was “back with a vengeance” in Germany, “despite tight budgets, uncertainty and complexity”.
“Companies are travelling because relationships, trust and presence matter more than ever right now,” she explained. “The nature of travel is changing – Europe is becoming more important and rail is taking the lead on many routes.
“Travel management is becoming broader, more strategic and more demanding. We are no longer just talking about booking but also mobility, duty of care, security, data quality, AI and integrated management.”
The survey, which was conducted in January and February before the start of the Iran war, found that 62 per cent of respondents expected an increase in business travel this year with only 4 per cent forecasting a decline.
Unger said that VDR was planning a new “ad hoc” survey in the next few weeks to find out how the conflict in the Middle East has impacted this sentiment. A global poll by GBTA earlier this month found that European buyers were generally more pessimistic about the impact of the war than their counterparts in other regions.
2025 performance
VDR’s research showed that the number of business trips by Germany-based firms rose by 8.3 per cent year-on-year to 116.1 million in 2025, which the association said was “particularly driven” by SMEs, which accounted for 78 per cent of all volume (90.3 million trips).
“They [SMEs] must hold their own against larger players, enter new markets, and actively maintain customer relationships – because economic uncertainty hits them faster and harder,” said VDR in the report.
Despite this increase in volume, VDR said the average cost per trip fell by 4.8 per cent to €418 in 2025, which was attributed to “recessionary pressure shaping travel behaviour” in Germany, as travellers “must spend noticeably less per trip”. This was being achieved through shorter stays, lower booking classes and “tighter planning”.
Unger added that the drop in average trip cost was “not a price drop but a shift in behaviour”, which was seeing travellers make decisions such as booking a three-star hotel instead of a four-star property.
VDR’s report found that total spending on business travel in 2025 rose by 3.2 per cent year-on-year to €48.6 billion, with a clear trend for more international travel outside Germany – 42 per cent of trips were international last year compared with 35 per cent in 2024.
Europe is driving this increase in international trips by German companies, accounting for 30.2 per cent of all overnight stays in 2025, up from a share of 24.2 per cent in 2024. Travel to the rest of the world remained flat year-on-year at 11.7 per cent, while the share of overnight domestic travel fell from 65 per cent to 58 per cent over the same period.
VDR said that rail was becoming the “backbone” for medium distance travel due to its lower carbon footprint and travellers being able to work throughout the journey. Rail made up 46 per cent of spending by mode of transport for German firms in 2025, well ahead of air travel at 27 per cent and company cars (17 per cent).
Savings focus
The report highlighted how travel management was becoming a “critical measure for cost optimisation”, as German companies face a combination of tighter budgets, rising prices and increased travel volumes.
The survey found that cost control and optimisation was the main benefit of travel management for 81 per cent of respondents; 59 per cent reported cost savings of 6 to 10 per cent, while 11 per cent saved between 11 and 20 per cent with a structured travel management programme.
VDR added that accommodation and subsistence were areas where companies were looking to reduce costs from travel, having already identified "effective measures" to cut transport costs, such as earlier booking and using more trains. Although improving cost control for meals is difficult with tax-free allowances for domestic travel in Germany having remained unchanged since 2020.
The report highlights several “friction points” when paying for hotels, including high transaction fees (identified by 56 per cent of respondents) and the complexity of hotel billing (50 per cent), with its web of receipts, cost centres, policies and payment data.
VDR said companies were not responding to these challenges by cutting the amount of travel but by managing it more effectively. This is primarily being achieved by monitoring travel policy compliance (72 per cent of respondents), which enables them to identify “deviations early and allows corrective action before they appear in monthly accounts or trigger renegotiation”.
Around half of respondents (47 per cent) said that a key measure to improve cost control was introducing travel management systems in the first place, alongside traditional procurement strategies, such as negotiating preferential rates with suppliers (45 per cent).
Artificial intelligence
The report says that while AI has “arrived” in travel management, its use has so far been “largely pragmatic” and focused on automating routine tasks, structuring data and helping to enforce policies more consistently.
For those companies using AI, its biggest benefits have been fewer offline bookings (76 per cent), more use of self-service tools (51 per cent) and increased benchmarking (40 per cent). VDR’s survey showed that AI is mostly utilised in the areas of expense management (75 per cent), policy compliance (73 per cent) and data management (68 per cent).
In terms of challenges around AI, data protection and IT security are seen as the biggest concern for 49 per cent of respondents, with integration into existing systems being a worry for 29 per cent of travel managers.