Warning on business travel spending
US business travel spending will increase by 3.1 percent in 2015 and 3.7 percent in 2016, according to the?Global Business Travel Association?s third quarter outlook for US business travel.
While this is still positive growth, it is down from GBTA?s July projections of increased spending by 4.9 percent in 2015 and 5.4 percent in 2016.
It says this softening in business travel spending can be linked to growing uncertainty and risk associated with the global economy, especially in China, Russia and the Middle East and the global collapse in oil prices.
The slower growth rates can be attributed to:
* US companies are becoming far more selective in authorising business travel abroad as a result of global economic uncertainty and risk.?International outbound travel has been the most prominent driver of the recovery since 2009,?however, but while GBTA expects 5.4 percent growth in international outbound business travel volume this year, spending growth rates will be slashed by more than 50 percent from 2014 (from 8.6 to 3.4 percent);
* Inflation in the business travel sector will be nearly flat (0.5 percent) in 2015 and modest (3.0 percent) in 2016, primarily due to the collapse of global oil prices. While the volume of US originated trips will increase 0.7 percent from 495.8 million in 2014 to 499.2 million in 2015 and 514.8 million in 2016, the total growth rate for spend is actually down.
This is especially true in two areas ? air travel spending, which will decrease by 3.4 percent in 2015, and ground transportation spending, which will decrease by 7.7 percent; and
* Actual (as opposed to projected) business travel figures,?which were revised to indicate higher trip numbers and lower spending figures for 2014.
?Business travel drives business growth, so the slowing growth in business travel spending should sound a clear note of caution for the US economy,? the report warns.