Group business travel to rebound in 2013
Wednesday, January 9, 2013
The fiscal cliff negotiations that had executives on the edge of their seats toward the end of 2012 narrowly averted severe sequestrations and tax increases that would have affected many companies across the nation. However, the lingering problem of mandatory government spending reductions has the potential to further disrupt economic growth in the U.S. and abroad. While this is still a matter of concern to many companies, group and international business travel is expected to make substantial gains this year, according to the Global Business Travel Association (GBTA).
The GBTA recently published its annual "GBTA BTI Outlook" report for the coming year. In it, analysts predict that business travel growth will remain sluggish in the first two quarters, but will make significant gains toward the end of the year.
Notably, the report predicts substantial improvement in both international and group business travel. Outbound international business travel from the U.S. is expected to increase by 5.9 percent by the end of the year, with group trips projected to grow by 5.2 percent. These figures are substantially better than those recorded in 2012, with gains of 0.7 and 1.3 percent reported, respectively.
"The projections that we see for both international and group travel are encouraging," said Michael W. McCormick, executive director and chief operating officer of the GBTA. "Businesses will be looking to capitalize on growth opportunities abroad and spend more on in-person meetings and events as well. By nature, meetings are longer-lead investments that require greater confidence in the future."
Business travel is a vital engine of the U.S. economy. As more executives hit the road in 2013, service providers in the hospitality sector are likely to benefit from the increase in travel. However, while many organizations will be embarking on more business trips this year, the need to keep costs down is greater than ever. As a result, serviced apartments and corporate housing could make substantial gains against corporate suites at chain hotels, as executives seek more cost-effective accommodation solutions while traveling abroad.
Although saving money is likely to be a primary concern for most organizations in 2013, overall spending confidence is up from last year. The GBTA report indicates that, according to its proprietary BTI Index, 2013 will exceed the record pre-recession spending index of 120.