Domestic Travel Climbs as Companies Capitalize on Strengthening U.S. Economy
ALEXANDRIA, Va., July 9, 2013 /PRNewswire-USNewswire/ -- Business travel spending should continue to climb through 2013, driven in large part by growth in domestic travel spending. This is a notable shift from prior years when companies had to look abroad for business opportunities in the face of a sagging U.S. economy. Now, signs of a healthier domestic economy, including steady job gains and higher consumer confidence, are encouraging companies to increase their investment in domestic travel.
Overall, business travel spending for 2013 is now expected to reach $273.3 billion – an upgrade from last quarter's forecast of $268.5 billion for the year, according to the GBTA BTI™ Outlook – United States 2013 Q2, a report from the Global Business Travel Association, sponsored by Visa, Inc. This would be a 4.3% increase in spend over 2012.
"With the U.S. economy moving into a more stable growth mode, companies are seizing on opportunities closer to home," said Michael W. McCormick, GBTA executive director and COO. "The rise in domestic business travel spending is a positive sign of increasing business confidence and bodes well for future employment growth."
Importantly, solid growth in travel spending is not being driven by rising prices alone. The GBTA report finds that "real" travel spending growth per trip (the increase after accounting for travel price inflation) is projected to hit 1.3% this year – in contrast with 0.3% in 2012. (See Graph One in Key Metrics section.)
"It's encouraging to see the return and increase of domestic business travel," said Tad Fordyce, head of Global Commercial Solutions at Visa, Inc. "These increases are positive reinforcements that travelers are regaining confidence in our own economy and re-investing in the growth of their businesses. We hope to see these increases have a ripple effect on international travel in key markets in the coming future."
Steady Global Outbound and Group Travel Growth
International outbound business travel spending is expected to grow by 3.0% in 2013 to $33.1 billion – a slight decline from last quarter's projection of $33.3 billion. This is due in part to a softening in the economies of key U.S. export markets, including China and the Euro-zone.
Group travel spending should also continue to grow in 2013, rising by 5.3% to $117.1 billion. However, GBTA expects group travel volume to fall slightly by (0.3%) in 2013 to 166 million person-trips, driven by some continued corporate constraints on meetings activity.
GBTA BTI: Trending Slowly Upwards
The GBTA BTI™ is a proprietary index of business travel activity. Due to the relatively slow pace of economic recovery in the U.S., the BTI's rise has been measured but steady. This quarter it reached 124, a two point gain over last quarter.
It is expected to continue its rise through 2013, reaching 127 by the end of the year.
The GBTA BTI™ Outlook – United States 2013 Q2 report is available exclusively to GBTA members by clicking here and non-members may purchase the report through the GBTA Foundation by emailing data-omniture="http://10.86.178.43:2011/Users/mhenning/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/Intl%20BTOfirstname.lastname@example.org" target="_blank">email@example.com. To view an abstract of this research, click here.
About the GBTA BTI™ Outlook – United States
The GBTA BTI™ Outlook – United States projects aggregate business travel trends over the next eight quarters. The report includes key buy-side metrics such as total business travel volume and spending, plus supply-side projections of changes in costs, across both transient and meetings travel. GBTA BTI™ Outlook – United States 2013 Q2 is the twelfth report in the series. Releases are published on the second Tuesday of each quarter.
The GBTA BTI™ Outlook uses an econometric model to better inform the forecast process. The model explicitly relates measures of business trip volume and spending, sourced from D.K. Shifflet & Associates to key economic and market drivers of business travel including: U.S. Gross Domestic Product (GDP) and its components, U.S. Corporate Profits and Cash Flow, U.S. Employment & Unemployment, ISM Business Sentiment Index, Key Travel Components of CPI (airfare, lodging, food away from home, rental cars, fuel, transportation), among other components.
About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and corporate meetings organization. Collectively, GBTA's 5,700-plus members manage over $340 billion of global business travel and meetings expenditures annually. GBTA provides its network of 21,000 business and government travel and meetings managers, as well as travel service providers, with networking events, news, education & professional development, research, and advocacy. The foundation was established in 1997 to support GBTA's members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbta.org/foundation.
 Due to upward revisions of 2012 data, some percentage forecasts for 2013 are slightly lower than announced in the previous quarter, although absolute dollar figure forecasts are higher than announced in the previous quarter.
SOURCE Global Business Travel Association