The Global Business Travel Association?s quarterly report shows that the business travel market has stabilized, but the outlook for international outbound travel is troubling due to the ongoing uncertainty of the European debt crisis and rising oil prices.
Business travel is showing signs of moderate but stable growth for the coming year, according to the latest Business Travel Quarterly Outlook ? United States, released April 10, from the Global Business Travel Association (GBTA) and sponsored by Visa. The report shows that the business travel market has stabilized, but the outlook for international outbound travel is troubling due to the ongoing uncertainty of the European debt crisis and rising oil prices.
GBTA continues to believe business travel will reach its pre-recession levels by the middle of 2012, with measured growth throughout the year as economic headwinds persist. GBTA forecasts that business travel spend will increase by 4.6% in 2012 on a slight (0.8%) decline in person-trips. As an economic indicator, the steady growth of business travel spend has continued to track accurately against job growth in the U.S. over the last 12 months.
?It seems like we can start to breathe a sigh of relief about business travel,? said Michael W. McCormick, GBTA executive director and COO.
GBTA research demonstrates that 2011 was a year of growth for business travel. Total spending on U.S.-initiated business travel hit $251 billion in 2011 ? up from $234 billion in 2010. This included $111.7 billion spent on transient business travel, $107.7 billion spent on group business travel and $31.6 billion spent on international outbound travel.
Total Person-Trip volume reached 445 million in 2011, up from 437 million in 2010. This figure will fall slightly to 440.4 million Person-Trips in 2012.
GBTA research demonstrates that since 2000, the number of business trips taken has declined, while the amount spent on business travel has increased ? and not due solely to price inflation. In 2000, 576.06 million trips were taken with a spend of $242.9 billion. 2011 saw the number of trips decrease to 445.0 million (decrease of 22.7%) and spend increase 3.3% to $251.0 billion. In 2012, the trend will continue, as the number of trips dips 1% while spend increases 3.6%.
In fact, GBTA research shows that the average spend on a trip in 2000 was $422 and in 2011 it has grown by 33.6% to $564. While inflation alone accounts for 64% of the increase in average spend, the real increases in spending account for 36% of the total increase.
McCormick explained: ?Aside from the boost in 2010 and 2011 when we were starting to get back on track after the worst of the recession, this trend makes perfect sense. We?re seeing road warriors taking fewer trips, but making the most of them, making more stops and spending more on the road. The productivity explosion is a huge factor and it?s being brought on by better travel management, better technology and making the most of their time on their road. In the past, a road warrior may make two trips rather than just spending an extra night, or three travelers would go out on a trip together, where now it?s fewer. This is a remarkable trend that we don?t see ceasing.?
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