Business travel hits highest levels since recession began

Most travel observers say any real recovery starts with business travel, so a new study by the Global Business Travel Association that cites higher anticipated growth at the end of last year is a highly positive sign of economic recovery.
 

That development came as meeting groups also reported increases. Meeting Professionals International, for example, forecasts an eight percent increase in the number of meetings planned in 2011.
 

If the last quarter of 2010 is any indicator, business travel has made a big bounce back. Biz travel was up by US$4.2 billion in the fourth quarter over the third quarter, said the GBTA Business Travel Index, and was at its highest point since the global recession began in 2008.
 

"Thanks to increasing corporate confidence, companies are investing more in business travel which will further stimulate business activity and economic growth," said Global Business Travel Association (GBTA) executive director Michael McCormick.
 

An earlier GBTA study found that even “substantially higher fuel costs” for the crucial business travel market would not deter future economic growth.
 

Future growth in business travel spending and the number of trips taken would be impacted – but would not force an overall market decline – by a short-term oil price spike, according to GBTA.
 

“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 McCormick. He added:
 

“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.”
 

“These are very heartening signs,” he said. “Business travel spending is coming back at robust levels, indicating the shape of things to come – namely more travelers on the road, an improving economy, and a positive environment for continued job growth,” he added.
 

GBTA Foundation research shows that increasing business travel spending is a leading indicator of future job growth.
 

With economic improvement and more business travelers hitting the road, travel prices are also recovering from their sharp declines during the recession, said GBTA.
 

International markets continue to present new opportunities for company growth and remain top of mind for many executives as they look to maximize this potential, the association added.
Key points from their research:
 

—-GBTA expects spending for 2011 will advance by 6.9 percent to more than $245 billion.
 

—-Analysis of airfare, lodging, meals, and ground transportation including car rentals shows travel prices in 2010 increased by 2.5 percent and are projected to increase between 2 percent to 4 percent for 2011.
 

—-International travel is driving large increases in spending as companies are increasingly sending their executives abroad to take advantage of global growth potential. Last year saw the growth of 17.3 percent in international travel spending for the year at roughly $29 billion.
 

—-Group travel rose 6 percent in 2010 and should rise 7 percent in 2011.
 

Said McCormick:
 

“Group travel, events and conferences are large expenses with long lead times. Companies lacked the confidence and clarity to make these longer-term investments when the economy was struggling, but these increases are further evidence that companies are feeling much better about investing in business travel and face-to-face meetings once again.”
 

The findings were released in the latest Business Travel Quarterly Outlook – United States from the Global Business Travel Association Foundation, the education and research arm of the Global Business Travel Association, sponsored by Visa.
 

By David Wilkening