Industry Research

Business Travel To Reach Pre-Recession Level By Mid-Year

Posted on April 18, 2012

ALEXANDRIA, Va. — 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), sponsored by Visa. The report 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% in 2012 on a slight (0.8%) 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 12 months.

“It seems like we can start to breathe a sigh of relief about business travel," said Michael W. McCormick, GBTA executive director and COO. “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.”

“Whether for business or pleasure, Visa account holders spent more than $235 billion on travel related purchases in 2011 — a 14% increase from 2010,” said Tad Fordyce, head of global commercial solutions at Visa Inc. “As a leader in the corporate travel market, Visa is committed to providing best-in-class solutions to our financial institution customers and their clients in the public and private sectors.”

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.
Total person-trip volume reached 445 million in 2011, up from 437 million in 2010.  This figure will fall slightly to 440.4 million person-trips in 2012.  

A decade of fewer trips and greater spend
GBTA research demonstrates that 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. In 2000, 576.06 million trips were taken with a spend of $242.9 billion. 2011 saw the number of trips decrease to 445 million (decrease of 22.7%) and spend increase 3.3% to $251 billion. In 2012 the trend will continue, as the number of trips dips 1% while spend increases 3.6%. In fact, GBTA research shows that the average spend on a trip in 2000 was $422 and in 2011 it's grown by 33.6% to $564. While inflation alone accounts for 64% of the increase in average spend, the real increases in spending account for 36% of the total increase.

McCormick explained: "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. We're seeing road warriors taking fewer trips, but making the most of them, making more stops and spending more on the road. The productivity explosion is a huge factor and it's being brought on by better travel management, better technology and making the most of their time on their road. In the past, a road warrior may make two trips rather than just spending an extra night, or three travelers would go out on a trip together, where now it's fewer. This is a remarkable trend that we don't see ceasing.”

Group travel spend: Modest growth continues
Transient business travel spend finished 2011 strong – ending the year up 6.7%, after falling .4% in 2010. But this rate won't continue as GBTA expects growth to be far more modest in 2012 and 2013 (3.7% and 3.9% respectfully), staying in line with the slow-growth pattern of the economic recovery. Group travel will keep pace with transient growth as long as no significant economic shocks take place. Economic shocks disproportionately impacts group travel compared to transient travel. Spending on group business trips in 2011 was up 7.2% over 2010.  GBTA projects group travel spending will slow to 3.3% in 2012 as uncertainty in Europe and higher energy prices continue to impact the overall economy.

GBTA Business Travel Index: Enroute to pre-recession highs
The GBTA Business Travel Index (GBTA BTI for Q4 2011 came in at 116, two points lower than the projected value in GBTA's last outlook. The GBTA BTI is expected to see stable growth over the forecast horizon, reaching its pre-recession high of 120 in 2012 Q3. The index is expected to grow about one point per quarter through 2012 before picking up pace in the second half of 2013.

This slightly lower index value has been driven by continued uncertainty in the Eurozone, higher global energy prices, and continued slow growth in the domestic economy. Business travel had a relatively good 2011, but Q4 GBTA BTI finishes just one point above 2010 Q4's 115, as international economic risks and slow domestic growth have challenged robust recovery. The GBTA BTI provides a way to distill market performance and the outlook for business travel into a single metric that can be tracked over time.  

Source: GBTA Foundation

View comments or post a comment on this story. (0 Comments)

More News

Travelers Booking With Agents Avoid Sharing Economy

New data shows more requests from clients for alternate accommodations and new ground transportation options.

Driverless Cars Could Kill More Than Four Million Jobs

Chauffeurs are among the many drivers who would no longer be needed.

How To Satisfy Any Generation Of Business Traveler

Countless factors can ruin a business trip, but what aspects actually make travelers happy?

Ritz-Carlton Named Top Luxury Brand

The hotel received the highest rankings in consistency, physical appearance, personal amenities, and meeting facilities.

Cheap Airfares To Power Corporate Travel Growth

A new report indicates global hotel rates should see a modest increase over the next year, while airfares are expected to stay flat.

See More News

Facebook Comments ()

Comments (0)

Post a Comment

Submit

Blogs

See More

See More

See More

See More

LCT Store

LCT Magazine - September 2016 $12.95 COVER STORY: * How Do We Max Our Markets? * *
LCT Magazine - August 2016 $12.95 COVER STORY: * Stay in the Black Despite Insurance Blues * *



Connect

Experience the three annual industry events for networking for business, showcasing vehicles and products, and getting the tools for success.

Read About Your Region

What’s Happening Near You?
Click on any state to see the latest industry news and events in that region.

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The number 1 resource for vocational truck fleets

Metro Magazine

Serving the bus and passenger rail industries for more than a century

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

Please sign in or register to .    Close