While consumers are bristling at rising airfares and the weak dollar, business traveler demand is holding up and continuing to grow, according to industry leaders.
"We are starting to see the volumes we were seeing prerecession," Charles Petruccelli, president of American Express Global Travel Services, said last month at the World Travel & Tourism Council summit in Las Vegas.
Petruccelli described the recession as "very violent" for corporate travel and said some companies had cut their travel by 17%.
Since then, he said, business travel has rebounded but behavior has changed, with companies looking more at tools to control costs.
Tyler Peak, president of Peak Travel in San Jose, Calif., said that new cost-consciousness was bringing Peak business.
His company experienced an increase in excess of 30% in corporate sales for the first quarter of this year, partly due to a better economy on the West Coast but also to new accounts, he said.
"Part of the reason for our new sales last year and currently is that corporations are looking more closely at how they are spending their dollars and are rebidding to see if they can add a bit more value to their service package," he said.
American Express saw corporate business first rebound in 2010, when it experienced double-digit growth over 2009.
The Global Business Travel Association indicated that the fourth quarter of 2010 showed the strongest seasonally adjusted quarter-over-quarter business travel growth since the recession began.
In 2010, total U.S. spending on business travel grew by 3.2%, exceeding a previous forecast of 2.3%.
Travel Leaders Corporate said that it is experiencing a much stronger first half in 2011, with total bookings in corporate travel on pace to exceed 2010 by 7.5%.
Jerry Behrens of Tzell Travel Group, which is 75% to 80% corporate travel, said that same-store sales were up 13.2% through May and that transactions were up 11%, which he said was mostly due to new business.
On the hotel side, Pegasus Solutions said it noted a dip in corporate travel bookings in April, after double-digit growth in March. But it said the reverse appeared to be temporary and that booking growth could reach double-digit increases over 2010 as early as May, with stronger growth potential in the second half of the year.
During the WTTC conference, travel executives dismissed concerns that the Internet and online meeting systems would replace corporate travel.
"There is no substitute for face-to-face meetings," Petruccelli said. "If you don't visit your customer, your competitor will."
That sentiment was supported by an Oxford Economics study commissioned by the WTTC on the economic impact of business travel, presented at the conference.
The report said global business travelers estimate that roughly 50% of their prospective customers are converted to new customers with an in-person meeting, vs. 31% without such a meeting (click on chart at right for a larger version).
In addition, the report found that on average, business travelers believe that 38% of their customers would switch to a competitor and their companies would lose 37% of annual sales without in-person meetings.