Oil Prices No Match for Business Travel, Study Shows

The current unrest in North Africa and the Middle East already has caused a noticeable increase in prices at the gas pump. Luckily, a short-term spike in the cost of oil will not force an overall business travel decline, although it will affect future growth in business travel spending and in the number of trips taken, finds a new study from the Global Business Travel Association (GBTA), the results of which were released last week.


The study, "What Does Triple Digit Oil Mean for Business Travel," identified three different scenarios in which oil prices would remain above $125, $150 and $200 per barrel throughout 2011, with prices returning to baseline level by 2013. In all scenarios, it found, business travel spending and number of trips taken would continue to grow, although at a lower rate over time.

According to GBTA, the three scenarios are:

• Oil priced at $125 per barrel would result in a reduction of nearly $5.8 billion, or 1.5 percent, in total U.S. business travel spending and roughly 700,000 trips forecast between 2011 and 2013.

• Oil priced at $150 per barrel would result in a reduction of nearly $6.9 billion, or 1.8 percent, in total U.S. business travel spending and roughly 1.8 million trips forecast between 2011 and 2013.

• Oil priced at $200 per barrel — the "extreme shock scenario," according to GBTA — would result in a reduction of almost $9 billion, or about 2.5 percent, in total U.S. business travel spending and roughly 2.7 million trips forecast between 2011 and 2013.

"In light of current developments in the Middle East and the highs we're now seeing in oil prices, this research shows business travel is more resilient than the conventional thinking might suggest," said GBTA Executive Director and COO Michael W. McCormick. "It underscores the point that business travel is, very simply, central to economically productive activity overall. So, although an oil price spike would be very painful for the travel industry, essential travel would clearly go on and in fact the number of trips taken would continue to increase."