Travel agents looking to supplement their income with business-travel bookings may have to revise their 2016 business plans. The Global Business Travel Association’s (GBTA) education and research arm is forecasting only “moderate” growth in the sector through the rest of this year.
The GBTA Foundation reported today that U.S.-originating business travel grew 1.8% year-over-year in the first quarter of 2016. This is the second consecutive quarterly report where the Foundation has downgraded its forecast.
Financial market volatility, plus weakened global economic growth and its impact on commodity prices, exchange rates, and corporate earnings, are the key drivers of the slowed activity, GBTA said. This has caused “a growing number of businesses” to re-institute cost controls, and revisit hiring, capital expansion plans, and travel budgets, according to the GBTA BTI™ Outlook.
Michael W. McCormick, GBTA executive director and COO, summed up the 2016 forecast as “uncertainty, causing slow growth.”
The GBTA BTI™ Outlook – United States 2016 Q1, a report by the GBTA Foundation is expecting the current issues “will likely resolve themselves later this year and create more confidence for individuals and organizations alike in 2017.”
GBTA reports that in the fourth quarter of 2015, U.S. business travelers spent $72.4 billion and produced 125.1 million person-trips, an increase of 0.7% in spend and flat year-over-year growth in trip volume.
It is estimated that there will be over 500 million business-travel trips taken in 2016 and more than $295 billion spent on business trips this year. Business travel spending is expected to increase 1.9% in 2016 to $295.7 billion, and business-travel volume is forecast to increase 2.1%, to 508.6 million trips.
As a result, business-travel sector pricing is forecasted to grow 2.5% this year, followed by a 4% uptick in 2017. Lodging prices continue to outpace inflation, GBTA reports, following an estimated 5.1% jump in 2015.