TIA Forecasts Declines In Business Travel, Prepares For TBR Merger

The Travel Industry Association in its annual forecast today said business travel continued to soften throughout 2008 with further declines expected next year, although officials detailing the outlook struck a tone of optimism for 2010.

TIA senior vice president of research Suzanne Cook today called business travel "the weakest link" in the domestic travel industry, anticipating a 4 percent decline this year and an additional 2.7 percent decline next year. "Short term, we think the forecast is chilly, but long term it will certainly brighten in the next couple of years," Cook said. "2008 so far has been a difficult year for business travel."

Cook said the domestic leisure segment and inbound international travel have helped to prop up the overall domestic travel industry this year and suggested a "flat picture" overall for 2008. While business travel is anticipated to slow at a faster rate than leisure, cuts are expected on all sides, Cook said. "We think leisure travel will hold up to last year's levels, but we won't see any increases," Cook said of the full year 2008 leisure outlook. "In fact, we think we'll see a modest decline in 2009 of about 1.3 percent."

Cook said that international inbound travel grew by 10 percent this year, but the TIA forecast anticipates a 3 percent decline in such traffic next year.

Despite the pessimism permeating the industry and bleeding into 2009 outlooks, TIA expects 2010 to bring about a turning point for business travel. "We think business travel will begin to start to recover in 2010 as the economy comes out of recession, which it certainly will," Cook said. "That's another theme we've heard, that yes, we're in a recession, but not a depression. Next year will be tough, but we'll see brighter days ahead."

Meanwhile, the Travel Business Roundtable, the political advocacy group of CEOs and other senior executives representing more than 50 travel organizations, yesterday approved a year-end merger with TIA. TBR has been working since 2005 through a formal strategic partnership with TIA, which plans to re-brand itself following the merger as the U.S. Travel Association.

Geoff Freeman, TIA senior vice president of public affairs, acknowledged that TBR had accomplished a great deal with very limited resources. "As we move forward," said Freeman, "and expand those resources, we need to expand the agenda. Over the past decade, that agenda largely has been focused on how to welcome more international visitors to the United States." He said the group's focus now also would encompass domestic challenges, "including concerns about the economy and concerns about business travel, including what can be done to encourage businesses, whether through legislative or public relations activity, to continue to travel for business, meetings and conventions. That's a space we are working on to see how Congress can stimulate travel to stimulate the economy." He said the group also would broaden the scope of its activities to focus on air travel costs and delays as well as on the issue of environment and sustainability.

Led by Loews Hotels chairman and CEO Jonathan Tisch for 11 of its 13 years, TBR raised the profile of the industry in Washington, D.C. TBR president and chief legislative affairs counsel Chuck Merin, of BKSH & Associates, at the founding of TBR described the travel industry as "the Rodney Dangerfield of American business." Since TBR's inception, Tisch and other members have met with more than 200 members of Congress and others in the executive branch in efforts to press the travel industry's public policy agenda.

In addition to gaining respect for the industry among policy makers, Merin counted among TBR's victories the delay in the Western Hemisphere Travel Initiative, the delay of biometric passport requirements and the extension of the U.S. visa waiver program, as well as efforts to promote the United States as a travel destination. Merin noted the U.S. House of Representatives recently approved the Travel Promotion Act, which has 52 cosponsors in the Senate. He said the Bush Administration had threatened to veto the bill, but said senators are attempting to make it part of the second economic stimulus package, which the Senate is expected to vote on after they return from recess on Nov. 17.

Tisch said that Roger Dow, one of TBR's founders who became TIA's president and CEO nearly four years ago, has transformed that organization, making it more responsive to its members and strengthening its government affairs efforts.

Dow said the new organization would be able to dedicate more manpower to public policy advocacy. "Instead of one or two people and a couple of lobbyists," he said, "there now are six and soon there will be a couple more, so that we can really put the resources that are necessary toward this." Dow was one of several industry leaders to recognize Tisch's steady leadership and vision that had shaped a voice and a role for the industry in public policy issues. He added that he had asked, and Tisch had agreed, to serve as the chairman emeritus of the merged entity.