NBTA Predicts Increase in Business, Group Travel Spending

A key indicator of economic health — business travel spending — is expected to increase by 5 percent this year, according to the National Business Travel Association (NBTA) Foundation, which this week released the results of its latest "Business Travel Quarterly Outlook – United States" research report.

Sponsored by VISA, the report estimates that U.S. business travel spending will be $58.8 billion during the first quarter of 2011, while total trips will equal 109.9 million, up 6.7 percent and 8.6 percent, respectively, over the first quarter of 2010. Meanwhile, NBTA estimates that business travel spending grew 2.3 percent in 2010, up dramatically from 2009, which saw a 14.1 percent decrease in business travel spending.

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. Two years later, it had fallen 20 percent to 96. In the third quarter of 2010, it was 103, and today it is 108. NBTA forecasts that the BTI will reach 120 again in late 2012.

"Our research is ringing in the new year with reason for cautious optimism," said NBTA Executive Director and COO Michael W. McCormick. "Based on the way 2010 began, the year wrapped up better than expected thanks to a number of factors, including higher than expected GDP, stronger exports and very strong corporate profits. These trends are translating into greater business travel spending as companies invest in travel to drive revenues and compete aggressively in a recovering economic environment."

The strongest business travel sectors, according to NBTA, are international travel and group travel. In 2010, outbound international travel spending was estimated to grow by 16.9 percent, versus a 32.1 percent decline in 2009. Spending on group travel, meanwhile, was flat in 2010. This year, spending on both international and group travel is expected to grow 3.2 percent.

"International outbound travel in particular remains strong and should continue to grow through 2012 as American companies seek opportunity in robust export markets," McCormick continued. "2011 should also see a welcome recovery in the group travel market after a number of very difficult years. Companies are once again recognizing the value of face-to-face meetings with customers, prospects, partners and colleagues to build relationships and set the stage for top-line growth."