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Published on : Monday, January 18, 2016
U.S. business travel will continue to grow at stable and steady rates over the next two years, despite significant headwinds from Asia Pacific, Latin America and the Middle East. These findings are part of the GBTA BTI Outlook – United States 2015 Q4, a report by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), sponsored by Visa, Inc.
“The U.S. business travel market is an island of stability in a sea of global volatility,” said Michael W. McCormick, GBTA Executive Director and COO. “Over the next two years, U.S. business travel spending will grow at just above 3 percent, but this is largely driven by price, not transaction level increases. In this environment of modest transaction growth, low inflation levels and global uncertainty – we can expect continued consolidation in the business travel industry.”
Overall, the GBTA Foundation business travel forecast found that the U.S. economy has returned to pre-Great Recession footing, but without the same speculative dangers that existed in 2007 and 2008. This bodes well for future U.S. business travel spending, which the GBTA Foundation predicts will grow at 3.2 percent in 2016 and 3.5 percent in 2017, reaching $299.9 billion and $310.4 billion, respectively.
Two key factors will limit further growth during this time:
“The forecasted growth for the U.S. business travel market is good news for travel industry buyers and suppliers,” said David Henstock, VP, Global Commercial Solutions at Visa, Inc. “No matter where employees travel, organizations that use electronic payments have a convenient and secure way to pay for business travel.”
According to the forecast, price growth is expected across key travel goods and services in 2016 with the exception of airfares. Even if airfares drop slightly, however, rising ancillary fees will likely will result in higher total cost of air travel.
Group vs. Individual Business Travel
Group business travel slightly outperformed individual travel activity in 2015. Average spending on group business travel, however, declined slightly from $700 in 2014 to $694 per group business trip in 2015. Volume growth will pick up the pace over the next two years, growing in the 3 percent range, but spending growth will remain restrained for group business travel through 2016 before loosening up in 2017.
Individual business travel volume took a hit in 2015, only growing at a projected 0.4 percent, but GBTA forecasts it to return to an above average pace in 2016 and 2017, growing 2.9 percent and 3.0 percent, respectively. Individual business travel spending is projected to grow 4.9 percent in 2016 and another 2.4 percent in 2017.