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October
11, 2012
Economic
Uncertainty Dampens U.S. Business Travel Growth
Economic turmoil in Europe, slower growth
in China and U.S. unemployment are expected to curb business
travel growth in the United States through the end of the
year, according to the latest GBTA BTI(tm) Outlook - United
States, a report from the Global Business Travel Association
(GBTA) sponsored by Visa, Inc. With disappointing job gains
and the upcoming Presidential election on the horizon,
businesses appear to be taking a cautious approach to their
investment in travel until there is greater economic
certainty.
GBTA now expects total U.S. business travel spending to grow
2.6% for 2012, reaching $257 billion by the end of the year.
While this is a moderate increase since last quarter, when
GBTA estimated growth for 2012 at 2.2%, the uptick in spend
is largely being driven by rising business travel costs.
Total business trip volume is expected to reach 438.1
million for 2012 - a reduction of -1.6% from 2011, when
total business trip volume was 445 million.
Looking ahead to 2013, GBTA research forecasts business
travel spend will grow 4.9%, reaching $270 billion - which
is a slight upgrade from the 4.7% growth in 2013 that GBTA
forecast last quarter. Total trip volume is expected to fall
-1.1% in 2013.
"Corporations are in a wait-and-see mode and holding back on
investment decisions that would help boost the economy,"
said Michael W. McCormick, GBTA executive director and COO.
"While companies aren't cutting their business travel spend
and we're still seeing very modest growth, we are cautious
about the outlook for the next several quarters. The looming
'fiscal cliff' is causing even more uncertainty, which we
are monitoring with real concern. This is an economy in need
of some good news to shore up business confidence and
encourage more travel."
"While it appears that the current economy is weighing on
the minds of travelers, for the first half of this year, we
saw U.S. and international travelers increasing their spend
on Visa accounts," said Tad Fordyce, head of global
commercial solutions at Visa Inc. "From January to June of
2012, international travelers increased travel spend on
their Visa accounts by nine percent in the U.S. to $20.1
billion. U.S. travelers were also active for the first six
months, increasing travel spend on their Visa accounts by
seven percent to $17 billion. 2012 has the ability to be the
year of the traveler if we can continue this momentum of
business and leisure travel."
For 2012, GBTA now forecasts that transient travel spend
will advance by 2.9%, group spend by 2.3%, and international
outbound business spend - previously a major driver of
overall travel spending growth - by 2.5%. These forecasts
are expected to remain constrained unless overall economic
momentum increases significantly.
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