U.S. Business Travel: An Island of Stability
Every quarter GBTA looks at economic trends and business spending to see where the business travel industry is headed. Our latest report, the BTI™ Outlook – United States 2015 Q4 – finds that U.S. business travel is an island of stability in a sea of global volatility.
Overall, the BTI Outlook finds that the U.S. economy has returned to pre-Great Recession footing, but without the same speculative dangers that existed in 2007 and 2008. This bodes well for future U.S. business travel spending, which the GBTA Foundation predicts will grow at 3.2 percent in 2016 and 3.5 percent in 2017, reaching $299.9 billion and $310.4 billion, respectively.
However, this growth is largely driven by price, not increases in the numbers of transactions. So this suggests that we can expect continued consolidation in the business travel industry.
Several factors are, in fact, limiting the breakout growth and increase in transactions that we all would like to see.
First, business travel inflation in 2015 was at historically low levels due to the combination of a strong dollar and very low oil prices. In fact, price growth was the lowest rate witnessed since the Great Recession. In 2016 and 2017, price growth will return to normal – 2.6 percent and 3.0 percent, respectively.
Secondly, challenging global macroeconomic factors affecting key regions are also putting a damper on increased growth. While North America and Western Europe were two of the most stable regions in the world in 2015, Asia-Pacific, Latin America, the Middle East and Africa were a drag on the global market. This trend is likely to persist in 2016.
Given these factors, growth will remain positive and a steady driver of economic activity in the United States. But – at least over the next two years – we don’t expect to see the type of rapid growth that suggests that the economy is firing on all cylinders.