GBTA: Higher Overall Business Travel Spending In 2013 But Fewer Trips - Business Travel News

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GBTA: Higher Overall Business Travel Spending In 2013 But Fewer Trips

January 08, 2013 - 02:20 PM ET

By David Jonas

The Global Business Travel Association in a report released Tuesday painted a somewhat positive picture for business travel in 2013. The group forecast a 4.6 percent year-over-year increase in U.S. business travel spending this year—including domestic and outbound international trips—but a 1.1 percent drop in trip volume. That suggests a higher average cost per trip than in 2012, an increase GBTA characterized as "very modest price inflation."

According to the association, the increase in spending—to be driven by more robust outbound international and group travel—will accelerate throughout the year, starting with a 2 percent rise in the first quarter and growing incrementally to 7.2 percent in the fourth quarter. "While companies will approach the first half of the year with some caution, pent-up demand to get back on the road should hopefully fuel accelerating growth in business travel spending through the end of 2013," according to a statement attributed to GBTA executive director Michael McCormick.

GBTA added a caveat that total spending will increase "provided there is continued easing of economic and political uncertainty."

The projected increase would reverse the slower business travel spending GBTA reported for late 2012, when "companies postponed critical investment decisions until after the U.S. presidential election and congressional debate on the fiscal cliff." According to the association, overall 2012 U.S. business travel spending grew 1.6 percent year over year on a nearly 2 percent decline in trip volume.

For 2013, business travel spending within the domestic U.S. market is projected to increase 4.4 percent while trip volume slides down 1.1 percent.

International outbound travel spending, after having "stumbled" to 0.7 percent growth in 2012 amid economic concerns in Europe that affected business confidence worldwide, is expected to increase nearly 6 percent this year, GBTA estimated. "Although the eurozone remains troubled, increasing industrial production and retail sales in China signal an improving economy for 2013," the association wrote. "A stronger China will improve U.S. export growth and help act as an engine for international outbound business travel."

GBTA also expects stronger group travel spending, with annual growth around 5.2 percent this year following a 1.3 percent increase in 2012.

For 2014, GBTA forecast total U.S. business travel spending to jump 7.3 percent on a 1.7 percent increase in trip volume. Projected 2014 domestic travel growth is noticeably weaker than outbound international, with spending pegged to increase 6.5 percent and 13.1 percent, respectively, and trip volume to rise 1.6 percent and 7.6 percent, respectively.

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