US Business Travel Industry Will See Steady Growth, Study Finds
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There is a modicum of good news on the business travel front as a research study finds that all is well in this corner of the travel industry for the foreseeable future.
The news comes thanks to research from GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), sponsored by Visa, Inc.
Its findings aren’t exactly cause to pop champagne for those in the business travel marketplace. However, finding that things will remain relatively tepid as far as growth is concerned is actually great news considering the economic state of the world.
The report states unequivocally: “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.”
Now to put some numbers to that claim, the study issues the following in regards to inflation and International travel.
Inflation Rates: “Business travel inflation in the United States has been at historically low levels due to a stronger dollar and plummeting oil prices. In 2015, price growth was the lowest witnessed since the Great Recession. In 2016 and 2017, price growth will return to normal – 2.6 percent and 3.0 percent respectively – but breakout potential will be limited.”
Travel Abroad: “Business travel to international destinations will continue to face challenges from poor global macroeconomic fundamentals. While North America and Western Europe were two of the most stable regions in the world in 2015, Asia-Pacific, Latin America, the Middle East and Africa were a drag on global growth. This trend will likely continue in 2016 as well.”
While it may be slow going for those outside this particular nation, it seems U.S. travel will soldier on at an improved, albeit small, rate.
The study states there is a percentage to go along with the sentiment, putting the growth at, “3.2 percent in 2016 and 3.5 percent in 2017, reaching $299.9 billion and $310.4 billion, respectively.”
Even those promising numbers, however, have to be tempered a bit.
GBTA Executive Director and COO, Michael W. McCormick, offered: “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.”
The graph at left illustrates rather nicely what we can expect in the immediate future.
The decrease in airfare price actually echoes what we have heard, especially from recent thoughts from Jay Rein, VP of Travel & Hospitality Industry Solutions Practice at EPAM Systems.
Back in December, Rein opined, “In the U.S. Air Travel Market, many forces will drive airfare wars unlike anything we have seen in years.”
For those in other parts of the industry, a small amount of growth commensurate with a seemingly healthy economy is to be expected.
The rest of the report is quite interesting, especially the note that group business travel dipped a bit from 2014 to 2015—although, again, growth at about three percent is expected.
Of course, there is always a level of uncertainty, especially in regards to business travel. However, some in this particular marketplace can breathe just a bit easier with a favorable outlook for the next couple of years.
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