GBTA: US Business Travel Spending Is Slowing Down
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The growth of business travel spending in the U.S. will slow in the coming months, according to the results of the Global Business Travel Association's U.S. BTI Outlook for 2015's third quarter.
The latest outlook projects U.S. business travel spending to increase by 3.1 percent in 2015 and 3.7 percent in 2016. Both of those figures are significantly lower than revised projections released this past July that forecasted spending growth of 4.9 percent and 5.4 percent in 2015 and 2016, respectively.
The GBTA attributed the slowdown to economic uncertainty abroad.
"Growth in U.S. business travel spending is softening as result of the uncertain macro-economic environment," GBTA Executive Director and COO Michael McCormick said in a statement. "While the number of trips are up, total spending per trip is down. That can be linked to growing uncertainty and risk associated with the global economy, especially in China, Russia and the Middle East and the global collapse in oil prices."
"This should sound a clear note of caution for the overall U.S. economy," McCormick concluded.
The third quarter U.S. BTI outlook also found that air travelers appear to be benefiting from plummeting oil prices in 2015, with the average airfare for a domestic roundtrip coming in at $379 compared to $392 last year.
Prior to this year, the average airfare for a domestic roundtrip had increased every year dating back to 2010.
Interestingly, the GBTA pointed out that increasing ancillary fees are likely to negate those savings, with revenue from those fees having risen in three out of the past four years.
While the updated forecast projects the volume of U.S.-originated trips to increase by 0.7 percent to 499.2 million in 2015 and then climb to 514.8 million in 2016, growth of spending isn't likely to mirror that trend — because of flat to modest inflation in the business travel sector — with air travel spending expected to decrease by 3.4 percent in 2015 and ground transportation spending projected to decrease by 7.7 percent.
"As we look to 2016, we remain optimistic that business travel growth will accelerate," wrote GBTA Foundation Vice President of Research Joseph Bates in a statement. "As business travel increases, so too will growth in the overall economy."
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