Business travel spending growth slowed through the tail end of 2012 as companies postponed critical investment decisions until after the U.S. presidential election and Congressional debate on the fiscal cliff. However, the business travel forecast for 2013 should be more positive, provided there is continued easing of economic and political uncertainty – presenting an early indication of greater corporate confidence in spending decisions.
According to the "GBTA BTI Outlook — United States 2012 Q4,"a report from the Global Business Travel Association (GBTA) sponsored by Visa, Inc., U.S. business travel spending is expected to rise 4.6% in 2013 to $266.7 billion, on a slight -1.1% decline in trip volume to 431.8 million person-trips for the year. The key factors in 2013 business travel spending growth are projected to be:
- Increasing international outbound travel spending – projected to rise 5.9%
- Increasing group travel spending – projected to rise 5.2%
- Very modest price inflation – indicating that companies will be spending more real dollars on business trips.
Spending growth in 2013 should begin modestly, at 2.0% in Q1 and 2.9% in Q2, and then pick up the pace with rates of 6.4% in Q3 and 7.2% in Q4.
“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 Michael W. McCormick, GBTA executive director and COO. “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.”
At the close of 2012, annual U.S. business travel spending is estimated by GBTA to have grown 1.6% to $254.9 billion, on a -1.9% decline in trip volume to 436.5 million person-trips.The spending increase was mainly due to rising travel rates.
- This increase in spending for 2012 was also a downgrade from GBTA’s previous forecast of 2.6% last quarter, reflecting the ongoing uncertainty of the fiscal cliff debate and the economic impact of Superstorm Sandy.