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US Business Increases Spending for Domestic Travel
ALEXANDRIA, Va. -- Business travelers spent an estimated $72.8 billion on U.S.-originated business travel during the second quarter, a 7.1% increase compared with the second quarter of 2013. This rise comes despite a slight year-over-year reduction of 0.1% in the number of trips taken in the second quarter.
Likewise, so far this year, group business trips -- travel to business meetings or conferences -- are expected to dip 3.3% while spending on group business travel is expected to increase 5.9%. Together, these findings underscore that businesses are spending more per trip, indicating a strengthening economy.
In total, U.S.-generated business travel spending is expected to increase 6.8% to $292.3 billion this year, according to the GBTA BTI Outlook - United States 2014 Q3, released by the GBTA Foundation, the education and research arm of the Global Business Travel Association, and sponsored by Visa Inc. "The continued strong demand in business travel spending is a positive sign for our economy. This signals that companies are continuing to put travelers on the road to achieve their business objectives," said Michael W. McCormick, GBTA executive director and chief operating officer, in a prepared statement. "Business travel spending is a leading indicator of overall economic growth."
The report's key findings:
While individual business travel volume is expected to grow only 2.3% in 2014 -- in line with GBTA's second-quarter forecast -- spending is expected to increase 7% year-over-year, driven by higher travel prices and additional spending per trip.
Similar to individual business travel, group travel spending is expected to disproportionately increase over volume, increasing 5.9% year-over-year in spending while declining 3.3% in volume.
Travel costs are expected to increase 2.9% this year and an additional 3.5% in 2015, led by rising food and beverage costs, hotel prices and airfares. These expectations have been raised from the previous quarter, mainly due to increasingly higher food and beverage costs and airfare.
International outbound business travel, a key indicator of global economic recovery, is expected to grow in volume by 5.6% this year, followed by another 6.5% in 2015. This comes after a minor 1.1% increase in 2013. Factors that prevent international outbound business travel from rising at a faster pace include the struggling European recovery, a moderating Chinese economy and economic challenges in many emerging markets in Latin America.
Published by The Business Journal, Youngstown, Ohio.
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