Improved American Business Travel Outlook

The American economy is still struggling, so its good to learn that business travel spending and volume remained steady in the second quarter of 2011.  It is estimated that business travel expenditure reached an estimated $62.2 billion, which represents a  growth of 6.3% compared to the second quarter of 2010.  The forecast for total business travel spending growth in 2011 also remains strong at 6.9% according to the latest “Business Travel Quarterly Outlook – United States”  from the Global Business Travel Association Foundation.

Continued business travel spending suggests improvements in the U.S. economy and despite setbacks this year including rising oil prices, natural disasters, slowing global growth, and shaky consumer confidence. Travel prices are on the rise, with growing demand providing suppliers with the excuse to boost rates.

Michael W. McCormick, GBTA executive director, said "By the end of 2010, it looked like the light at the end of the 'recession tunnel' was becoming brighter as the economy overall and business travel specifically were gathering positive momentum. We've now hit a soft patch in the economic revival, but business travel spend levels tell us the recovery should continue as companies invest in driving future growth. Now is the time when companies will absolutely call upon their strategic travel programs to help offset rising costs and keep travelers doing business."

Travel prices are on the rise, with increases expected to continue throughout the rest of 2011, but at a more moderate pace than earlier in the year. Airfares have swelled due to rising energy prices, constrained capacity and relatively strong demand. Higher lodging rates are also driving increases in company travel costs while corporate demand also continues to grow, particularly for luxury hotel rooms. As a result, business travel prices are expected to increase by 4.5% to 5% in 2011

As international trade continues to drive global growth, U.S. companies are upping their investment in international travel.  Total spend on trips abroad is estimated to hit $31.8 billion in 2011, a 9.1% increase over 2010 and a substantially higher rate of increase than total spending growth.  

Mr McCormick concluded: "Corporate and management confidence remains high, which is why we're still seeing companies put employees on the road.  We think there is good reason to maintain measured optimism about the growth of the economy."