Business-travel spending will continue to grow this year, but growth will be tempered by economic headwinds, according to the Global Business Travel Association’s (GBTA) latest Business Travel Quarterly Outlook.
GBTA forecasted that business-travel spending would increase 4.6% in 2012, with a 0.8% decline in person-trips (a trip by one person in any mode of transportation).
“We’d like to see these record corporate profits trickle down through the rest of the economy,” Michael McCormick, GBTA executive director and COO, said in a statement. “But as the European economy teeters on the brink, corporations remain cautious. But because business travel drives corporate growth, we should expect road warriors to remain busy in 2012.”
The results for the fourth quarter reveal that business travel finished 2011 with stronger growth than expected. In 2012, GBTA expects that business-travel growth will outpace an anticipated 2.3% growth in GDP, despite uncertainties in the economy.
In 2011, person-trip volume reached 446.5 million, a 2.1% increase. Business-travel spending was up 7.6%, reaching $251.9 billion.
GBTA predicts U.S. prices for business travel will be 2.2% higher in 2012, down from a 4.3% increase for 2011. Reduced demand and lower fuel prices will be the leading causes of this improvement.
The group predicted that international outbound business travel will remain stronger than domestic travel, but will face challenges due to European economic issues.
The number of U.S.-initiated international business trips is expected to grow by 2.4% in 2012, down from 3.2% growth in 2011.
“For the last few quarters, international travel has been a bright spot in business travel, due to the higher cost of travel and the steady growth in the number of trips,” McCormick said. “However, it looks like the pressure building in growing economies will cause slower but steady growth in 2012.”
Group travel was very strong 2011, GBTA said, and is projected to finish up 7.6% year over year.
However, group travel spending “will be hard-pressed to repeat that performance” in 2012, GBTA said, and growth is expected to fall back to 4.2%.