The Global Business Travel Association (GBTA) released on Oct. 9 the results of its latest GBTA Business Travel Index (BTI) Outlook — United States, slightly revising its predictions from July.
The GBTA BTI Outlook for the U.S. found that economic turmoil in Europe, slower growth in China and U.S. unemployment are expected to curb business travel growth in the country through the end of the year. Businesses are more cautious to invest in travel because of low job gains and the upcoming presidential election, the report said.
GBTA is predicting continued slow but steady growth over the forecast horizon, with the BTI hitting its pre-recession peak of 120 by the end of the year. The BTI is forecast to grow just over a point per quarter over the next six quarters.
The GBTA report predicts that total U.S. business travel spend will grow 2.6% for 2012, reaching $257 billion by the end of the year. It also expects spending to grow 4.9% to $270 billion for 2013. Total business trip volume is expected to be at 438.1 million for 2012 – a reduction of 1.6% from 2011. Another reduction of 1.1% is expected in 2013.
The projected pace of growth in the international outbound travel sector has been constrained due to economic worries in Europe. Also, the volume of both imports and exports to China and the rest of the Far East is projected to slow over the next six quarters, leading to lower levels of business travel to and from the U.S.
GBTA projects international outbound spending to grow 2.5% in 2012, followed by a 7.7% rise in spending in 2013, despite the forecast of 5.5% and 11%, respectively, less than six months ago.
For 2012, GBTA forecasts that transient travel spending will advance by 2.9% and group spending by 2.3%.
Unlike other reports that demonstrate a correlation of increased business travel spending and job creation, this report found that job creation has been concentrated in sectors that are less travel prone such as retail, restaurant and manufacturing.
The GBTA BTI Outlook – United States projects aggregate business travel trends over the next eight quarters. It uses an econometric model that relates measures of business trip volume and spending to key economic and market drivers of business travel including: U.S. Gross Domestic Product (GDP) and its components, U.S. Corporate Profits and Cash Flow, U.S. Employment & Unemployment, ISM Business Sentiment Index and Key Travel Components of CPI.