Air Travel News
Business travel group sees pickup in trip spending this year
In its latest quarterly projection, the Global Business Travel Association said it expects to see U.S. businesses spending more on corporate trips in 2013—especially later in the year. But that projection carries one big caveat.
According to GBTA’s latest Business Travel Index Outlook, the group expects to see travel spending at U.S. companies increase by 4.6 percent in 2013, to $266.7 billion. But that growth will only come “provided there is continued easing of economic and political uncertainty,” the group said—a big “if.”
During 2012, GBTA said, business travel spending rose by a mere 1.6 percent. In its previous forecast, the group had said it expected to see 2012 business travel spending grow by 2.6 percent, but corporate travel slowed in the final months of the year due to “the ongoing uncertainty of the of the fiscal cliff debate” and the impact of Superstorm Sandy on the northeast.
Although business travel spending grew by 1.6 percent last year, GBTA said, the number of individual trips by business travelers dropped by 1.9 percent. “The spending increase was mainly due to rising travel rates,” GBTA said.
The group sees a similar trend for 2013, with trip volume forecast to fall by 1.1 percent even as spending rises 4.6 percent.
Spending is expected to grow by 2.0 percent in the first quarter of 2013 and by 2.9 percent in Q2, GBTA said, but then to show a 6.4 percent increase in the third quarter and 7.2 percent in the fourth.
Some segments of the market will outpace the overall growth rate in spending this year, the group predicted. For example, it expects spending on international trips by U.S. companies to post a gain of 5.9 percent, and spending on group travel to conferences and meetings to grow by 5.2 percent. In 2012, outbound international travel spending was up by less than 1 percent, while group travel spending rose by a mere 1.3 percent, GBTA said.
“Even with an agreement to avert the fiscal cliff in the near term, there are still many issues that need to be addressed; however, companies should now have somewhat greater confidence in their spending decisions,” said GBTA executive director Michael McCormick. “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.”