Meeting Mentor Magazine

October 2017

Business Travel Packs Economic Punch,
Spikes in Costs and Spending Ahead

A new report issued by the Global Business Travel Association (GBTA) highlights the strong economic impact business travel has on the nation’s economy.

“The U.S. Business Travel Economic Impact Report” found business travel responsible for about 3 percent ($547 billion) of U.S. GDP in 2016. According to the report, for every 1 percent change in business travel spending, the U.S. economy gains or loses 74,000 jobs, $5.5 billion in GDP, $3.3 billion in wages and $1.3 billion in taxes.

“The way people and companies conduct business has undergone transformative, digitally-led changes in the past 20 years. Yet this report shows that face-to-face interaction enabled by business travel remains a critical business tool,” David Reimer, senior vice president and general manager, North America, American Express Global Business Travel, said in a statement.

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The study was sponsored by the GBTA Foundation in partnership with American Express Global Business Travel. Other highlights from the report:

• In 2016, U.S. businesses spent $424 billion to send travelers out on the road for 514.4 million domestic business trips.

• Nearly half (48 percent) of U.S. business trips were taken for transient purposes (sales trips, client services, government and military travel and travel for construction or repair), while 28 percent were taken for group travel purposes. The remaining 25 percent of trips were taken for a combination of business and leisure.

• Three-quarters of the business trips taken in the United States in the last year included an overnight stay. Nearly 40 percent of business trips included a one-to-two-night stay, 22 percent a three-to-four-night stay and 14 percent stays of five nights or more.

• Domestic business travel accounted for about 94 percent of total trip-oriented business travel spending in the United States in 2016. Not surprisingly, the majority of business trips were taken to destinations with higher population densities and states with large business centers.

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More Business Travel Data

According to GBTA’s “2018 Global Travel Forecast,” travel prices are expected to rise sharply in the coming year, reaching nearly 4 percent increases in some travel sectors. The rise is largely driven by the strength of the global economy, the report says. The fourth annual forecast, produced by the GBTA Foundation in partnership with Carlson Wagonlit Travel, predicts global airfares to rise 3.5 percent in 2018; hotel prices to increase 3.7 percent, and ground transportation to rise only 0.6 percent.

Global business travel spend approached $1.3 trillion in 2016, advancing only 3.5 percent over 2015 levels, according to the “GBTA BTI Outlook – Annual Global Report & Forecast,” released in July. Pending many global uncertainties, business travel spending is expected to accelerate significantly next year, advancing 6.1 percent, followed by roughly 7.0 percent growth in both 2019 and 2020. Business travel spending gains have not reached this level since 2011, according to GBTA data. — Regina McGee

 

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