THE prospects for business travel are looking up in 2013 with corporate spending expected to be greater, based on the latest report by Global Business Travel Association (GBTA).
According to the association, US business travel spending is expected to rise 4.6 per cent in 2013 to US$266.7 billion, despite a slight 1.1 per cent decline in trip volume to 431.8 million for the year.
Factors driving this growth are the forecasted rise in international outbound travel spending by 5.9 per cent and group travel spending by 5.2 per cent, as well as modest price inflation, meaning that companies will be spending more real dollars on business trips.
“Even with an agreement to avert the fiscal cliff in the near term, there are still many issues that need to be addressed; however, companies should now have somewhat greater confidence in their spending decisions,” said Michael W McCormick, GBTA executive director and COO.
“While companies will approach the first half of the year with some caution, pent-up demand to get back on the road should hopefully fuel accelerating growth in business travel spending through the end of 2013.”
Previously a strong driver of overall business travel spending growth, international outbound business travel grew just 0.7 per cent in 2012 as the eurozone impacted confidence and caused a ripple effect on the US and Asia.
Although the eurozone remains troubled, increasing industrial production and retail sales in China signal an improving economy for 2013. Among other factors, a stronger China will improve US export growth and help act as an engine for international outbound business travel, said the report.
After a very challenging year with group travel spending rising just 1.3 per cent in 2012, 2013 should bring a welcome turnaround to the group travel market as the broader economy recovers.
“The projections that we see for both international and group travel are encouraging,” McCormick said. “Businesses will be looking to capitalise on growth opportunities abroad and spend more on in-person meetings and events as well. By nature, meetings are longer-lead investments that require greater confidence in the future.”
