Global Uncertainty Delays Growth in U.S. Business Travel
U.S. business travel will continue to grow moderately in 2016 as global uncertainty looms, according to a report by the Global Business Travel Association. It is expected to increase 1.9% in 2016 to $295.7 billion.
U.S. business travel will continue to grow moderately in 2016 as global uncertainty looms. It is expected to increase 1.9% in 2016 to $295.7 billion, and business travel volume is forecasted to increase 2.1% to 508.6 million trips.
This is one of the findings from the “GBTA BTI Outlook — United States 2016 Q1,” a report by the Global Business Travel Association (GBTA) Foundation and sponsored by Visa Inc.
For the second release in a row, GBTA’s forecast for U.S.-originated business travel has been slightly downgraded. The new report projects that business travel volume growth will increase slightly in the first quarter of 2016 — growing 1.8% percent on a year-over-year basis due to domestic and international factors that are causing global uncertainty and corporate caution.
While the latest GBTA business travel forecast found that 2016 will look very similar to previous years with anemic but steady growth, there is cause for optimism about 2017. According to the GBTA, the health of the global economy will become clearer and a number of factors, including the U.S. presidential election and the possible “Brexit” of the U.K. from the European Union, will become resolved later this year.
“If the past several years could be summed up as, ‘cautious but slow growth,’ 2016 is looking like it will be summed up as, ‘uncertainty causing slow growth,’” said Michael W. McCormick, GBTA’s executive director and chief operating officer. “Thankfully, a much brighter 2017 appears on the horizon. There are a number of factors leading to uncertainty, which is affecting growth in both our sector as well as the overall global and domestic economies. However, these issues will likely resolve themselves later this year and create more confidence for individuals and organizations alike in 2017.”
According to the GBTA report, other key findings include:
- In Q4 2015, 125.1 million person-trips were generated in the U.S. and $72.4 billion was spent on business travel activity. This represents flat year-over-year growth in trip volume and 0.7% growth in business travel spending.
- Financial market volatility has intensified in response to weaker global economic growth and its impact on commodity prices, exchange rates, and corporate earnings.
- Faltering share prices and falling bond yields have put many businesses into a cautionary mood; a growing number of business have been re-instituting cost control efforts and revisiting hiring, capital expansion plans, and travel budgets.
- Price growth is expected to normalize in 2016, growing 2.5%, followed by a gain of 4% in 2017.
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