Business Travel Will Remain Steady in 2012 But Cost More
Business travel will maintain its upward trajectory in 2012, but a stagnant U.S. economy is driving increasing corporate uncertainty and leading to projections of slower U.S. business travel spending growth next year, according to the latest "Business Travel Quarterly Outlook — United States," from the Global Business Travel Association (GBTA), sponsored by Visa.
2011 has been a year of resurgence, with business travel spend expected to grow 6.9% compared to 2010, hitting $250.2 billion. However, troubles in the economy are fostering more of a wait-and-see approach among corporations heading into next year, leading to a forecast of 4.3% growth in business travel spend for 2012 (or $260.9 billion).
“Uncertain economic conditions around the world continue to impact companies, which in turn impacts business travel plans and can lead to hesitation in spending. However, business travel spending growth remains vibrant, and the current environment does not portend a dramatic travel slowdown,” said Michael W. McCormick, GBTA executive director and COO.
“Companies are still investing in travel because they have become smarter and more conscious about the level of business travel that is critical to driving growth,” McCormick added. “They recognize where they cut back too much during the recession and won’t make the same mistakes twice, because they know there is great value in personal relationships and business travel is a critical component in sealing those bonds.”
GBTA finds that the expected growth in spend for 2012 will be largely spurred by price increases in travel goods and services. But although travel prices are projected to increase in 2012, pressure in the economy will mean that prices will grow more slowly than in 2011. GBTA predicts U.S. business travel price inflation to be 2.4% in 2012, compared to price inflation of 4.3% for 2011.
When it comes to the state of the economy compared to last year, travel buyers are seeing uneven levels of recovery. For North America, travel buyers have mixed feelings on the economy: 25% feel it's doing better, 47% feel it's the same, and 28% say it’s worse. There is still positive sentiment as 90% believe the economy will not get worse over the coming year.[Source: "Business Travel Quarterly Outlook — United States." Global Business Travel Association (GBTA), sponsored by Visa. 11 Oct. 2011. Web. 31 Oct. 2011.]