Research and White Papers
Eurozone Debt Crisis Threatens U.S. Biz Travel, GBTA Says
By Matt Alderton
February 16, 2012
Never mind that it's an ocean away: If the European debt crisis gets much worse, it could "wreak havoc" on U.S. business travel, according to the Global Business Travel Association (GBTA), which yesterday released a new research report showing that a severe crisis in Europe could result in a 9 percent decline in U.S. trips and a 16 percent drop in U.S. spending, totaling nearly $88 billion.
GBTA's report, "U.S. Business Travel Outlook: European Debt Crisis Scenario," identified three different scenarios for the European debt crisis:
• Baseline/Current Scenario: "A mini recession in Europe, which is already expected, would be short lived and would result in continued growth in U.S. business travel spending," according to GBTA, which projects that spending would total $263.5 and $277.3 billion in 2012 and 2013, respectively, while the number of trips taken also would grow slightly, to 443.1 and 443.6 million trips in 2012 and 2013.
• Moderate Scenario: "A prolonged recession in Europe would result in business travel growth flattening," GBTA said, with a reduction in spend of almost $40 billion (-7 percent) and roughly 42 million trips (-5 percent) forecast between 2012 and 2013.
• Severe/Extreme Scenario: "Widespread debt and banking failures across the Eurozone and possible dissolution of the European Union would push spending back to levels not seen since the Great Recession," according to GBTA, which said spending would decline by nearly $88 billion (-16 percent) and trip volume by over 76 million trips (-9 percent) between 2012 and 2013.
"This data serves as a wakeup call to the entire industry as we watch European policymakers work to contain the debt crisis," said GBTA Executive Director and COO Michael W. McCormick. "While these problems are happening abroad, they most certainly can have an effect at home. We've seen a resurgence in business travel investment, meaning slow but strong economic recovery for the U.S. However, in a severe situation where the Eurozone may even break apart, business travel would drop dramatically, severely impeding economic growth overall."
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