Signs of a healthier domestic economy, including steady job gains and higher consumer confidence, are encouraging companies to increase their investment in domestic travel, according to a recent report from the Global Business Travel Association. The quarterly report, GBTA BTI Outlook-United States 2013 Q2, predicts that domestic business travel spending should continue to climb through 2013.
Business travel spending is now expected to reach $273.3 billion – an upgrade from last quarter’s forecast of $268.5 billion for the year, and a 4.3 percent increase over 2012.
“With the U.S. economy moving into a more stable growth mode, companies are seizing on opportunities closer to home,” said Michael W. McCormick, GBTA executive director and chief operations officer. “The rise in domestic business travel spending is a positive sign of increasing business confidence and bodes well for future employment growth.”
The GBTA report finds that solid growth in travel spending is not being driven by rising prices alone. “Real” travel spending growth per trip (the increase after accounting for travel price inflation) is projected to hit 1.3 percent this year, compared with 0.3 percent in 2012. Sponsored by Visa Inc., the GBTA report is a proprietary index of business travel activity. The report includes key buy-side metrics such as total business travel volume and spending, plus supply-side projections of changes in costs, across both transient and meetings travel.
“It’s encouraging to see the return and increase of domestic business travel,” said Tad Fordyce, head of Global Commercial Solutions at Visa Inc. “These increases are positive reinforcements that travelers are regaining confidence in our own economy and re-investing in the growth of their businesses. We hope to see these increases have a ripple effect on international travel in key markets in the coming future.”
The report, the 12th in a series, also showed steady growth in both group travel spending and global business travel spending. International outbound business travel spending is expected to grow by 3 percent in 2013 to $33.1 billion – a slight decline from last quarter’s projection of $33.3 billion. This is due in part to a softening in the economies of key U.S. export markets, including China and the Euro-zone.
Group travel spending should also continue to grow in 2013, rising by 5.3 percent to $117.1 billion. However, GBTA expects group travel volume to fall slightly by 0.3 percent in 2013 to 166 million person-trips, driven by some continued corporate constraints on meetings activity.