Business travel finished 2013 with stronger than expected growth and heads into 2014 with a robust outlook, according to the Global Business Travel Association’s (GBTA) “GBTA BTI Outlook — United States 2013 Q4” report. This growth is due in part by strong investment in international outbound travel, a poorly performing sector over the previous two years.
U.S. spending on international outbound travel should jump 12.5% in 2014 to $36.7 billion, after just 1.8% growth in 2013 and 0.8% expansion in 2012, according to the GBTA report, which is sponsored by Visa Inc. This revival will be helped by steady improvements in the Euro-zone, the U.S.’s largest trading partner.
Overall, U.S. business travel spending is expected to advance 6.6% to $289.8 billion in 2014, while total person-trip volume is expected to increase 1.7% to 461 million trips for the year, according to the GBTA report.
“If our elected officials have finally gotten the message that political uncertainty and brinksmanship stifles economic growth, we should be looking at a very healthy year for U.S. business travel,” said Michael W. McCormick, GBTA executive director and COO. “Airports and hotels will be busy as American companies gain confidence and invest in travel to drive growth. And because business travel is a leading indicator of employment, this news is also another positive sign for the labor market.”
At the close of 2013, annual U.S. business travel spending is estimated by GBTA to have grown 3.8% to $272 billion, on a slight 0.3% decline in trip volume to 453.3 million person-trips. Notably, despite the federal government shutdown in 2013, the private sector delivered a stronger third quarter than expected, which boosted business travel spending, says GBTA.
“With the close of 2013 bringing stronger than expected growth in the U.S. business travel market, 2014 is poised to see even more growth,” said Tad Fordyce, head of global commercial solutions at Visa Inc. “After two years of tepid growth in outbound international business travel, GBTA projects this segment will see double digit growth in 2014 as more U.S. businesses increase travel spending.”
The GBTA BTI, a proprietary index of business travel activity, is estimated at 128 for Q4 2013 and 130 for Q1 2014. With economic momentum increasing, the BTI is now projected to reach 136 by the end of 2014, says GBTA.