The growth of business travel may not be blossoming quite as much as the industry thought. The Global Business Travel Association released a report today on their third-quarter outlook for U.S. business travel, and while there’s growth, it’s not as sharp as predicted earlier in the year.
The findings state that business travel spending will have ended up growing 3.1 percent in 2015 and 3.7 percent in 2016. This represents a drop from predictions earlier in the year, when growth was expected to be at a rate of 4.9 percent in 2015 and 5.4 percent in 2016.
“Growth in U.S. business travel spending is softening as result of the uncertain macro-economic environment,” said Michael W. McCormick, Executive Director and COO of the Global Business Travel Association. “While the number of trips are up, total spending per trip is down. That 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. This should sound a clear note of caution for the overall U.S. economy.”
The report attributes the newer predictions of slowed growth to three primary factors:
-Uncertainty with the global economy is causing U.S. companies to become much more selective about authorizing international travel.
-The collapse of global oil prices is causing inflation in the business travel sector to remain flat or increase only slightly (0.5 percent in 2015 and 3 percent in 2016.
-Actual figures relating to business travel volume in 2014 were lower than expected after being fully collected and vetted, causing predictions to drop correspondingly.
It also comes down to companies looking to save cash when it comes to travel.
“Companies are looking for ways increase business travel while still keeping costs in check,” said David Henstock, VP of Global Commercial Solutions, Visa Inc. “As companies look for efficiencies across their organization, electronic payments play a key role in helping both buyers and suppliers in the travel industry manage expenses and drive savings to their bottom line.”
