U.S. business travel volume is expected to drop 1.6 percent this year, according to a new study, with U.S. unemployment a contributing factor along with economic turmoil in Europe and slowing growth in China.
Despite the drop in volume, the Global Business Travel Association said higher prices will result in a 2.6 percent increase in U.S. business travel spending this year compared to 2011. Looking ahead to 2013, GBTA forecasts business travel spending will increase 4.9 percent, but trip volume will drop again, by 1.1 percent.
Group travel continues to lag trips by individual “transient” workers, the Alexandria, Va.-based firm stated, as companies husband resources for trips that promise to generate immediate sales.
“Corporations are in a wait-and-see mode and holding back on investment decisions that would help boost the economy,” said Michael McCormick, GBTA executive director, in a prepared statement. “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.”
Business travel spending is a one-to-two quarter leading indicator of domestic job growth, GBTA said, but the job gains in the current recovery are concentrated in sectors that do not spur much travel, including retail and manufacturing. As a result, business travel is not getting the bounce from employment growth in this recovery that was typical of past expansions, GBTA added.
