GBTA: Spending Growth Will Push Index to Pre-Recession Level

Total business travel spending is projected to increase by 4.6% in 2012, driven by higher prices and another increase in international business travel, according to the Global Business Travel Association.

The slow but steady growth should push the GBTA Business Travel Index to its pre-recession level of 120 by the second quarter. The index hit 117 in the third quarter of 2011.

The 2012 projection is a slight decline from larger-than-expected increases in 2011, when person-trip volume was up 2.1% to 446.5 million journeys and the total spend grew 7.6% to nearly $252 billion.

International outbound travel will top domestic travel this year as it did in 2011, according to the GBTA, which expects a 2.4% increase in business trips out of the U.S in 2012, following last year’s 3.2% increase.

In other news:

Biz Falls Behind Leisure Travel Growth
North American leisure travel is doing even better than business travel, according to Pegasus Travel Solutions. Average daily rates for leisure were up 5% in the third quarter of 2011, a trend expected to continue through the fourth quarter in what are usually off-peak periods for leisure. Corporate bookings in the last half of 2011 suggest a slowdown in the first quarter, as well as a rate increase, according to Pegasus.

Houston, We Have a Problem
Where do business travelers not want to go? Houston is conference-goers first choice for virtual meetings rather than the in-person kind. Atlanta Hartsfield leads the list of least-favorite airports, according to an online survey of registrants for VUE2011, the virtual events user conference. Nearly half of respondents, 49%, said they would prefer a virtual meeting to attending an event in Houston. Los Angeles fared almost as badly, with 42% giving the thumbs down. Orlando got 38% no votes, followed by 33% negative for Miami; 28% said no thanks to Chicago. On the least-favorite airport side, Atlanta Hartsfield was followed by Washington Dulles and Los Angeles International.

Inflight Wi-Fi Haves and Have-Nots
Business travelers counting on inflight wi-fi should head for AirTran, Delta and Virgin America, all of which have wi-fi on 100% of their domestic fleet, according to a PCWorld survey. That handily beats Frontier (35%), American (30%), Southwest (19%), US Air (17%) and United-Continental (2%). (AirTran is merging with Southwest.) Jet Blue has opted out of wi-fi in favor of live television.

Carbon Tax Raises Air Costs
The European Union’s new carbon tax on air travel kicked in on Jan. 1, immediately increasing air ticket prices for some, but not all, flights. OAG predicted an overall 3% increase in air prices for flights in or out of the 27 EU countries. Delta announced a $3 surcharge to cover the tax. China, India, Russia and other countries announced their air carriers will not participate in the carbon tax program. The European Commission could ban carriers that do not participate in the Emissions Trading System, which allows polluters to buy and sell permits based on carbon emissions. Some carriers may use stopovers in Dubai, Abu Dhabi and Doha to reduce their ETS costs, according to OAG. There are signs the tax would be waived if carriers show they are reducing emissions by other means. The alternative is an all-out trade war pitting the EU against the rest of the world.

The Check Is in the Mail
International travelers may be getting a surprise in the mail: a check. About 10 million consumers who used Diners Club, MasterCard, and Visa credit or debit cards for international purchases between Feb 1, 1996, and Nov 8, 2006, are due refunds. Most are around $18, but some could run to thousands of dollars. The payments result from settlements from a class action lawsuit alleging that credit card companies and issuing banks overcharged users and inadequately explained fees for purchases outside the U.S. A similar class action against American Express has also been settled. Most cards still charge foreign transaction fees, but they are more clearly stated. Some, including CapitalOne and Discover, do not impose foreign transaction fees.

Keep Your Eye on Expenses
“When money is coming in the front door, we tend not to focus on what’s going out the back door. I’m seeing in some cases that revenue went up 25%, but expenses went up 26%. The challenge is to not get giddy with increases in revenue and take our eye off the expense ball.” – Robert Joselyn, president & CEO, Joselyn, Tepper & Associates