U.S. business trips expected to drop 2 percent in 2012: Report
Economic turbulence is forcing U.S. companies to curb business travel through the end of the year, according to a new Global Business travel Association report released Tuesday.
The GBTA expects total U.S. business travel spending to grow 2.6 percent for 2012, reaching $257 billion by the end of the year. This is a moderate increase since last quarter, but the uptick is being attributed to rising business travel costs. Total business trip volume is expected to reach 438.1 million for 2012, a decrease from 445 million reached in 2011, the GBTA reports.
The business travel forecast for 2013 calls for an increase of 4.9 percent to $270 billion, but total trip volume is expected to dip 1.1 percent.
"Corporations are in a wait-and-see mode and holding back on investment decisions that would help boost the economy," said Michael W. McCormick, the trade group's executive director and chief operating officer, in a statement.
The GBTA report cites the unresolved eurozone debt crisis, slower growth in China, and a weak U.S. labor market for scaled back business travel. Business travel is taking off because employment growth in this recovery is in sectors that are less travel-prone, such as new retail, restaurants and manufacturing.
McCormick also cited growing concerns over the looming fiscal cliff; the tax cuts and mandatory spending cuts scheduled to kick in at the end of the year unless lawmakers are able to reach a bipartisan agreement. The GBTA is monitoring the issue “with real concern,” McCormick said. “This is an economy in need of some good news to shore up business confidence and encourage more travel."
One hopeful sign—though perhaps not enough to be the wind beneath their wings—is that senior corporate executives surveyed last month by Millionaire Corner report an improved economic outlook. Two-thirds consider themselves better off financially than they were a year ago. Just over half (52 percent) attribute their improved financial situation to an improvement in their portfolio’s performance, while just over one-quarter (27 percent) believe that the economy is improving.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.