Economic uncertainty in Europe will dramatically slow the growth of business travel in the U.S. through the end of the year, according to new research from the Global Business Travel Association—which directly reflects what we've been hearing from our MPI panel of senior meeting professionals. In our June Business Barometer, 7 percent of panelists reported concern over the European economy, consistent with the April numbers.
GIBTM also reported ongoing concern among industry practitioners in the U.S. economy, including low job growth, falling consumer confidence and retail sales and slowing corporate profits, and as such, the organization has significantly downgraded its outlook for U.S.-initiated business travel.
Despite the higher prices and relatively strong demand that have led to solid growth in business travel spend in the last few quarters; growth will be moderate for the remainder of the year, GBTA predicts. It now expects total business travel spending to grow just 2.2 percent for 2012, reaching US$256.5 billion by the end of the year. This represents a downgrade of 1.4 percent since last quarter.
Looking ahead to 2013, GBTA research suggests a slight drop (-0.7 percent) to 435 million total person trips. On the other hand, it forecasts business travel spend for 2013 to grow 4.7 percent to $268.5 billion, but if the situation in Europe worsens, the forecast for 2013 will necessarily be downgraded.