Companies are spending more on coworking spaces, while business travel has taken a setback. These are the findings of a new report by corporate card and expense company Ramp.
Giant coworking space operator WeWork was the ultimate winner in terms of companies’ spending, but ChatGPT’s maker, OpenAI, was also rapidly earning large amounts in the midst of the spending race.
Ramp’s most recent Spending Benchmark report observed trends in the final quarter of 2022 and covers consumers’ combined annual spending of $10 billion.
Specifically, from October to December, the amount spent on business travel and expenses as a percentage of overall transaction volume fell. Likewise, as a category, travel expenses and lodging both decreased from the previous month for the first time in six months. This may be a result of both the tech industry’s widespread layoffs, as well as businesses’ decisions to tighten their budgets in light of the current economic climate.
At the same time, office spending increased 5.7% in the final three months of the year, ranking sixth among the top categories in terms of fastest-growing types of company spending. In fact, according to Ramp, “The post-pandemic office is increasingly a coworking space.”
The findings also showed that WeWork saw a surge in spending of 90.7% in 2022. What’s more, throughout the year, it was continuously rated as the second-largest workplace vendor, topped only by Microsoft Store.
“Businesses aren’t hiring, but offices are still making a comeback as organizations look for ways to drive employee productivity,” Ramp concluded.
Unsurprisingly, AI also made the podium in terms of company spending:
“We predict hiring will remain muted in tech-oriented industries that are focused on enhancing profitability metrics,” Ramp reported. “It will pick up in labor-intensive industries that are addressing supply chain issues and demand. Spending with AI research companies, like OpenAI, will grow as companies invest in tools that can help lean teams achieve more.”
Meanwhile, expenditure on OpenAI surged in December. As more industries start experimenting with the technology, it’s likely that the upward trajectory will continue.
On Thursday, WeWork releases its fourth-quarter results.
