Although last year was a rough one for the group travel market, this year is looking up, according to the Global Business Travel Association (GBTA), which yesterday released its latest Business Travel Quarterly Outlook – United States research report, predicting a slow but certain recovery for business travel in 2013.For a recap of last week's top stories, check out MeetingNews Minute:
Overall, GBTA predicts a 4.6 percent increase in business travel spending this year, to $266.7 billion. The increase will start slowly, it says — spending will rise 2 percent in the first quarter and 2.9 percent in the second quarter — then grow more dramatically, rising 6.4 percent in the third quarter and 7.2 percent in the fourth quarter. This in spite of a 1.1 percent decline in trip volume, to 431.8 million person-trips for the year.
"Even with an agreement to avert the fiscal cliff in the near-term, there are still many issues that need to be addressed; however, companies should now have somewhat greater confidence in their spending decisions," said GBTA Executive Director and COO Michael W. McCormick. "While companies will approach the first half of the year with some caution, pent-up demand to get back on the road should hopefully fuel accelerating growth in business travel spending through the end of 2013."
The expected increase in business travel spending will be buoyed in large part by the aforementioned uptick in group travel, according to GBTA, which predicts a 5.2 percent increase in group travel spending this year — a huge improvement over 2012, when group travel spending grew just 1.3 percent.
Likewise, GBTA forecasts a 5.9 percent increase in international outbound travel spending, up dramatically from 0.7 percent in 2012.
"The projections that we see for both international and group travel are encouraging," McCormick said. "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."
Included in the Business Travel Quarterly Outlook is the Business Travel Index (BTI), a headline measure of the current and projected level of business travel in the United States. At the last industry peak in late 2007, the BTI was 120. Currently at 117 for the fourth quarter of 2012, it's expected to reach 119 in the first quarter of 2013 and 125 by the end of the year.