Corporate Agencies & GBTA See Great Year Ahead for Biz Travel

It’s not just the postman who will not be stopped by wind and hail. U.S. business travelers spent so much of this stormy winter on the road that the Global Business Travel Association this week upped its projected growth for corporate travel in 2014 by 13%.

The GBTA now predicts that U.S. businesses will spend $293.3 billion on travel this year, a whopping 7.1% more than last year. The projected rate of growth is 54% higher than the increase from 2012 to 2013, according to the quarterly GBTA BTI™ Outlook for the U.S.

Travel executives confirmed that 2014 is shaping up to be a great year for agencies in the corporate space.

“The business travel industry is firing on all cylinders,” said Marc Casto, president and COO of Casto Travel.

Casto said he has seen strong growth in nearly all corporate sectors, and particularly in software, bio-pharmaceutical, and venture-capital firms. As their spending increases, these companies are coming to understand the value in a managed travel program run by a smart travel agency.

Higher profits, more jobs
Among positive factors cited by the GBTA were: U.S. companies are seeing higher profits, feeling more confident in the future, and creating more jobs than they did last year.

Businesses are also spending more on international travel, now expected to increase by nearly 13% to $37.2 billion. Group travel is forecast to rise 7% to $126 billion.

Those numbers might explain why travel spending is growing much faster than the number of trips, which are expected to increase only 2% this year.

That combination produced a bigger increase than the 6.6% originally projected. Instead GBTA anticipates an increase in 2014 nearly as big as the growth the industry saw in 2011. Business travel grew much more slowly in 2012 and 2013.

“As the spring thaw gets into full swing, businesses are feeling more confident, with pent-up demand to get their employees back on the road,” said GBTA in a press release.

The GBTA’s report also noted that the Crimean crisis has had little impact on U.S. travel so far. But a trade embargo could hurt European economic growth, and in turn U.S. growth and business travel, while an oil embargo would push up the price of jet fuel.

Growth at T&T
At Travel & Transport, chairman and CEO Bill Tech said his agency’s 90% corporate travel business was up 14% in the first quarter, and meetings are “off the charts.”

T&T’s growth has been fueled by customers in construction and engineering, who are building bridges and hospitals and roads in the U.S., Canada, and the Middle East.

Tech said it’s “definitely a good time for small agencies, and large agencies, too, to get into the corporate travel business.”

But he also cautioned that the good economic news that fueled growth in the first quarter may not last into the second quarter. Recent figures put growth of the U.S. economy at just 1% in the first quarter, “and that could slow things down.”

Still, Tech said, “I’m bullish on the economy.”

Atlas expands overseas
At Massachusetts-based Atlas Travel, CEO Elaine Osgood said her firm had been studying the trends and the international market for the past couple of years, anticipating growth like that reported in the GBTA study.

“We’ve been watching the growth within our own organization and by our customers,” she said.

Just this week Atlas opened its first office in Europe.

Ripe for small agencies too
Like Tech, Osgood encouraged even small travel agencies to expand their horizons – and grow their bottom lines – by becoming more expert in corporate travel.

“A lot of the reason companies consolidate is to get the global data,” Osgood said, so growing a corporate niche begins with the ability to consolidate the data. That job can be accomplished by partnering with an agency or group of agencies.

“Even a small agency can handle international corporate business if you have the right partnerships,” Osgood said.

“We all started somewhere. You set a goal and you accomplish it, and then you set another goal.”