HomeSmart MoneyThe Big Mac Test: How SA’s Business Travel Costs Stack Up Globally

The Big Mac Test: How SA’s Business Travel Costs Stack Up Globally

When a Big Mac in London costs nearly double what you’d pay in Joburg, you know you’re onto something interesting about global pricing. It’s a quirky but telling way to understand cost differences around the world – and when it comes to business travel, those differences are eye-popping.

New data from FCM Consulting’s Q3 Trend Report 2024 paints a fascinating picture of just how far your travel rand stretches at home versus abroad.

“The Big Mac comparison perfectly captures what the report shows us in business travel costs. Same product, same quality, wildly different price tags depending on where you are,” says Bonnie Smith, GM of Corporate Traveller.

According to the report a business traveller can check into a sleek business hotel in Sandton for $130 a night, up 14% compared with Q2. Your colleague in London? They’re paying $315 (up 29%) for an equivalent room. In Paris, it’s $304, and Amsterdam will set you back $267. Meanwhile, Cape Town holds its own at $172 – still a relative bargain on the global stage, despite a quarterly increase of 29%.

The report reveals the most expensive cities for business travel per region, with London, Riyadh ($311), Singapore ($271), and New York ($490, up 15%) leading the pack. In contrast, cities offering better value include Jakarta ($139), Mumbai ($151), and Bangkok ($145) alongside Johannesburg. Gateway cities like Dubai ($170) and Abu Dhabi ($187) sit somewhere in the middle, reflecting their position as global connection hubs.

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The car hire story might be even more startling. That premium sedan you’re hiring in Johannesburg for $23 a day would cost you $65 in Germany. Same car, same features, same international rental company – just a very different number on the invoice.

When it comes to flying, things get really interesting. Global airfares are stabilising – with economy seats down by $16 (-3%) and business class up by $137 (+6%). Africa’s aviation scene is expanding – which is good news for regional travellers. With 2% more flights and 2.1% more seats, competition is helping keep those prices in check.

These price differences create opportunities for proactive travel management, says Smith. “It’s about understanding how to use these market differences strategically,” Smith explains. “When you’re looking at such significant price variations between markets, smart planning becomes crucial.”

As global travel demand increases, with hotel occupancy in major cities exceeding 50%, the value gap between domestic and international travel costs could widen further. However, Smith sees opportunities in this challenge.

“Companies need to think holistically about their travel programmes,” she advises. “Use the competitive domestic rates as a foundation, while working with your TMC to optimise international travel costs.”

[Note: All figures are drawn from the FCM Q3-2024 Trend Report]

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