Published on : Saturday, January 18, 2014
Business travel finished 2013 with stronger than expected growth and heads into 2014 with a robust outlook, propelled in part by strong investment in international outbound travel, a poorly performing sector over the previous two years.
U.S. spending on international outbound travel should jump a hefty 12.5% in 2014 to $36.7 billion, after just 1.8% growth in 2013 and an anemic 0.8% expansion in 2012. This revival will be helped in particular by steady improvements in the Euro-zone, the U.S.’s largest trading partner.
Overall, U.S. business travel spending is expected to advance 6.6% to $289.8 billion in 2014, while total person-trip volume is expected to increase 1.7% to 461 million trips for the year, according to the GBTA BTI™ Outlook – United States 2013 Q4, a report from the Global Business Travel Association (GBTA) sponsored by Visa, Inc.
“If our elected officials have finally gotten the message that political uncertainty and brinksmanship stifles economic growth, we should be looking at a very healthy year for U.S. business travel,” said Michael W. McCormick, GBTA executive director and COO. “Airports and hotels will be busy as American companies gain confidence and invest in travel to drive growth. And because business travel is a leading indicator of employment, this news is also another positive sign for the labor market.”
At the close of 2013, annual U.S. business travel spending is estimated by GBTA to have grown 3.8% to $272 billion, on a slight -0.3% decline in trip volume to 453.3 million person-trips. Notably, despite the Federal government shutdown in 2013, the private sector delivered a stronger third quarter than expected, which boosted business travel spending.
“With the close of 2013 bringing stronger than expected growth in the U.S. business travel market, 2014 is poised to see even more growth,” said Tad Fordyce, head of global commercial solutions at Visa Inc. “After two years of tepid growth in outbound international business travel, GBTA projects this segment will see double digit growth in 2014 as more U.S. businesses increase travel spending.”
Group Travel Accelerates in 2014
The meetings business has been on an upward swing for the past two years and this trend should continue in 2014. GBTA expects group travel spending to rise by 6.5% to $124.5 billion based on a volume increase of 1.7%.
“This is the healthiest growth outlook for meetings activity since 2011,” said McCormick. “Meetings are typically larger investments that require advance planning, and companies only make these decisions when they have confidence in the longer-term outlook for the economy.”