Business travel is showing signs of moderate but stable growth for the coming year, according to the latest Business Travel Quarterly Outlook – United States from the Global Business Travel Association (GBTA). The outlook was sponsored by VISA and shows that the business travel market has stabilized, but the outlook for international outbound travel is troubling due to the ongoing uncertainty of the European debt crisis and rising oil prices.
GBTA continues to believe business travel will reach its pre-recession levels by the middle of 2012, with measured growth throughout the year as economic headwinds persist. GBTA forecasts that business travel spend will increase by 4.6 percent in 2012 on a slight (0.8 percent) decline in person-trips. As an economic indicator, the steady growth of business travel spend has continued to track accurately against job growth in the U.S. over the last twelve months.
“It seems like we can start to breathe a sigh of relief about business travel,” said Michael W. McCormick, executive director and COO of the GBTA. “The continued stability of business travel bodes well for the economy as a whole and for continued recovery in the employment market as business travel is a leading indicator of both. While the outlook for Europe is cloudy and economic growth in Asia is slowing, things still look much better than they did twelve months ago.”
GBTA research demonstrates that 2011 was a year of growth for business travel. Total spending on U.S.-initiated business travel hit $251 billion in 2011 – up from $234 billion in 2010. This included $111.7 billion spent on transient business travel, $107.7 billion spent on group business travel and $31.6 billion spent on international outbound travel.
After growing 8.5 percent in 2011, international outbound travel spend is expected to slow to only 3 percent growth in 2012. Weaker demand in Europe and Asia has led to the slowdown. The number of total U.S.-initiated international business trips hit 6.78 million in 2011, 3.1 percent growth over 2010. GBTA expects growth in the number of trips to slow to 1.2 percent in 2012, followed by more a robust advance of 4.8 percent in 2013.
“International travel has been a major driver for business travel during the recovery, but the outlook is troubling,” said McCormick. “The Eurozone crisis is creating too much uncertainty for many businesses and causing many to rethink where they send their travelers. We don’t expect anyone to make drastic changes, because they won’t want to give up the advantage of the face-to-face meeting, but we do think those trips will become less frequent.”
According to GBTA research, since 2000, the number of business trips taken has declined, while the amount spent on business travel has increased and not due solely to price inflation
“Aside from the boost in 2010 and 2011 when we were starting to get back on track after the worst of the recession, this trend makes perfect sense,” said McCormick. “We’re seeing road warriors taking fewer trips but making the most of them and spending more on the road. This is a remarkable trend that we don’t see ceasing.”