Business travel trends mirroring economic conditions in the Americas
Wednesday, March 13, 2013
Corporate travel is often seen as a reliable indicator of wider economic conditions. As government officials in Washington, D.C., continue to try and hammer out a deal to avoid further financial woes in light of mandatory federal spending cuts, other parts of the Americas are not experiencing the same economic difficulties. In fact, according to the Global Business Travel Association (GBTA), Brazil is likely to see a return to double-digit growth in business travel spending in 2013.
Signs of resilience
As part of its biannual series of reports on various countries around the world, the GBTA recently published the results of a study that examined the state of business travel in Brazil. The findings of the report suggest that Brazil's corporate travel industry is set to exceed previously established levels and could reach new heights by the end of the year.
Domestic business travel in Brazil has remained one of the country's strongest growth sectors, with average annual increases of around 8 percent reported every year for the past 12 years. In 2013, the GBTA forecasts that domestic business travel will grow by almost 13 percent to $27 billion. International corporate travel is set to increase by an even larger percentage this year, with growth of more than 20 percent predicted. This would value the international business travel market in Brazil at more than $7 billion.
In addition to the strong growth indicators revealed by the report, data from the GBTA suggests that demand for hotel rooms has been driven by both domestic and international business travel. However, despite increased demand, supply remains inadequate to meet the projected volume of consumers. This, in turn, is likely to stimulate the real estate development market in Brazil, and it could also create demand for alternatives to corporate suites at chain hotels, such as serviced apartments and corporate housing.
"Brazil continues to be a bright spot globally when it comes to travel, with both domestic and international travel spending continuing to see strong growth," said Diego Rodríguez, head of commercial solutions for Visa Inc. Latin America and Caribbean, which sponsored the study. "According to the findings, Brazilian business travelers will surpass Italy, France and the U.K. over the next two years, as it continues rapid economic growth and development."
Market indicators
Although Brazil is fast outpacing North America in terms of growth in the business travel sector, conditions in the U.S. are aligning with overall market conditions. This could highlight a gradual return of confidence in the business travel sector, despite the ongoing economic implications of mandatory federal spending cuts.
A recent survey conducted by Newsweek and Orbitz for Business suggests that while business travel in the U.S. is expected to grow slowly during 2013, market activity indicates that the level of corporate travel reflects the financial conditions observed across the country. Approximately 74 percent of executives polled indicated they expect to travel as much as or more than they did in 2012 this year.
Another key finding of the report was that mobile integration for corporate travel booking policies represents a significant growth area. Only 12 percent of survey participants said they used a mobile device to book their corporate travel arrangements, but 90 percent of respondents indicated they booked trips online at least some of the time. More than 65 percent of executives polled said they used online travel management tools for three-quarters of their trips.
"Since business travel is an important driver of economic growth, we must continue to provide the service, technology and tools that give travelers the most convenient and cost-effective travel options," said Mark Walton, vice president of global strategic accounts at Orbitz for Business.