The Global Business Travel Association in a report issued on Tuesday downgraded its U.S. business travel forecast, citing an expectation for "economic turmoil in Europe, slower growth in China and domestic unemployment to continue to weigh on growth over the next six quarters."
The association now projects total 2013 U.S.-initiated business trip volume to drop 1.1%, larger than the 0.7% decline it forecast in July. GBTA last month also cut business travel spending forecasts for major European markets.
However, owing to "higher price levels," the association's latest report predicted that spending on all U.S.-initiated business travel in 2012 would rise 2.6% year over year to $257 billion, followed next year by an additional 4.9% increase.
Within the U.S. domestic market, GBTA now projects that business person-trips will slip 1.6% this year and another 1.2% next year. Transient travel volume is expected to fall back 1.7% in 2012 and 1.2% in 2013, while group travel volume is forecast to retreat 1.4% this year and 1% next year.
"Beginning in early 2010, when employment reversed direction and began to expand again, travel-prone jobs have not kept pace," according to the association's report.
"New retail, restaurant and manufacturing workers tend to travel much less than their business service, financial or utility industry counterparts. Said differently, business travel is not getting the bounce from employment growth in this recovery that was typical of past expansions."
That, GBTA concluded, is "another sign that the business travel recovery will continue to lag the broader economy."
GBTA's latest projections also include a marginal decline in 2012 U.S.-initiated international outbound person-trips followed in 2013 by 3.6% year-over-year growth.
International outbound spending now is expected to increase 2.5% this year and another 5.5% next year.
"As a base of comparison, less than a year ago, we expected growth of 5.5% and 11% in international outbound spend in 2012 and 2013, respectively," the association wrote.
"The projected pace of growth continues to get hammered as economic worries in Europe persist and growth in the developing world continues to slow." Source: Business Travel News