The Hidden Cost of Volatility: Why business travel is entering a new era of uncertainty
The recent escalation in the Middle East has done more than disrupt geopolitics - it has exposed just how fragile the economics of business travel really are.
In a matter of weeks, global energy markets have been thrown into turmoil. Oil prices have surged past $100 per barrel, with some forecasts suggesting further rises, driven by disruption to critical supply routes such as the Strait of Hormuz, through which around 20% of global oil supply typically flows. For airlines, this is not an abstract macroeconomic shift. Fuel represents up to a quarter of operating costs, and when prices spike this quickly, the impact is immediate and unavoidable.
At first glance, the consequence seems straightforward: higher fuel costs lead to higher fares. But the reality for business travellers - and those responsible for managing travel spend - is far more complex.
From fuel shock to fare volatility
Airlines are already reacting. Globally, carriers are introducing fuel surcharges, raising base fares, cutting routes and reducing capacity to manage the sudden increase in operating costs. In some cases, ticket prices have risen dramatically within days, while in others, capacity reductions are quietly tightening availability, pushing prices upward in less visible ways.
But what makes this moment different is not just the direction of prices - it is their unpredictability.
Traditional booking logic is breaking down. Advance purchase no longer guarantees value. Waiting for fares to “settle” is increasingly risky. Even comparing multiple options manually can produce misleading conclusions, as prices shift between search and purchase.
“In volatile markets, the issue isn’t just higher fares - it’s the loss of predictability. Without the right controls in place, businesses don’t just spend more on travel, they lose visibility over why they’re spending it”. Scott Pawley
This is volatility in its purest form: uneven, fast-moving and difficult to interpret.
And it is being compounded by structural pressures. Airspace closures across the Middle East are forcing airlines onto longer, more expensive flight paths. Some carriers are cancelling flights entirely, while others are consolidating schedules to protect margins. The result is a market where both price and availability are in flux - often simultaneously.
The real risk isn’t higher fares - it’s loss of control
For finance leaders, this is where the issue becomes critical.
Rising travel costs can be budgeted for. Volatility cannot.
When fares move unpredictably, unmanaged or loosely managed travel programmes are exposed. Booking behaviour becomes inconsistent. Policy compliance drops. Travellers make decisions based on incomplete or outdated information. And the organisation loses visibility over what it is actually spending - and why.
This is where some of the most common assumptions about business travel start to fail.
The idea that booking late preserves flexibility often results in paying a premium in a rising market. The belief that manually “shopping around” ensures the best deal ignores the speed at which fares now change. Even reliance on consumer booking tools can create a false sense of control, when in reality they provide no strategic oversight.
In a volatile market, these behaviours do not just underperform - they actively increase cost and risk.
The compounding effect on businesses
The financial impact is rarely immediate or obvious. It builds over time.
A slightly higher fare here. A missed opportunity to secure availability there. A traveller rebooking at short notice because of disruption. Individually, these are manageable. Collectively, they create significant budget drift.
More importantly, they erode the ability to forecast. Finance teams lose confidence in travel budgets. Procurement struggles to benchmark performance. Travel managers are left reacting to issues rather than controlling them.
And in the background, the market continues to shift.
Fuel prices remain volatile. Airlines adjust capacity dynamically. External shocks - from geopolitical developments to operational disruptions - feed directly into pricing. What was true yesterday may not be true tomorrow.
Stability in an unstable market
In this environment, the objective is not simply to reduce cost. It is to regain control.
That requires visibility - understanding how fares are moving and why. It requires consistency - ensuring travellers are booking within a structured framework. And it requires expertise - interpreting market signals and acting on them quickly.
This is where a managed approach to travel becomes not just beneficial, but essential.
A dedicated travel management company provides access to real-time data, structured policy control, and the ability to make informed decisions in a fast-moving market. It replaces reactive behaviour with proactive strategy. It turns volatility from a risk into something that can be navigated.
Because while businesses cannot control global energy markets, they can control how they respond to them.
And in a world where travel costs are no longer predictable, that distinction matters more than ever.
If your organisation is experiencing increasing volatility in travel spend, now is the time to review how that spend is being managed - and to speak to your travel management company about how greater control can be achieved.