Business travel projected to grow throughout 2013
Tuesday, January 8, 2013
Today, many companies are faced with an unenviable choice - invest money in expansion, or whether the economic storm and face potential losses as competitors move into emerging markets. For some organizations, this is not an easy decision to make. For others, however, necessities such as business travel are likely to be a key component of their growth strategies this year, according to USA Today.
Treading carefully
The news source reports that, according to recent data, many U.S. companies plan to increase spending on business travel throughout the year. The Global Business Travel Association (GBTA) predicts that American companies will spend approximately $266 billion on business travel this year, an increase of 4.6 percent from 2012's figures.
"At the end of the day, companies need to find ways to grow ... revenues and see their performance increase year over year, and quarter over quarter," said Mike McCormick, executive director of the GBTA, as quoted by the news source. "So there'll be this pressure to make investments and spend on business travel."
While many companies are feeling the pressure of expansion versus stagnation, saving money is likely to remain a top priority for most organizations. Rather than choosing corporate suites in chain hotel properties, some executives may opt to stay in serviced apartments and corporate housing to avoid compromising on quality while saving money.
External pressures
Finding suitable and cost-effective accommodations is not the only challenge executives will face this year. Consolidation of major airlines could drive up international airfare, especially for first- and business-class seats.
According to Business Travel News, the rumored merger between US Airways and American Airlines is looking increasingly likely. The news source reports that pilots for both carriers recently agreed to a memorandum of understanding concerning employment conditions if such a merger were to be approved. Aviation analysts claim that the move is a strong indication that a deal will be reached.
"With the American Airlines pilots reaching a pilot contract and labor groups at both airlines coming to an agreement in anticipation of a merger, the next logical step would be an announcement," said Helene Becker, an analyst at Dahlman Rose & Co., as quoted by the news source.
If the merger goes ahead, executives could soon face higher fares as the carriers solidify their position as a major carrier in the U.S. In light of potentially increased fares and the growing need to save money on business travel, corporate apartments could become an increasingly viable alternative to chain hotels in 2013.