US business travel spending to hit $299.9 billion in 2016
U.S. business travel will continue to grow at stable and steady rates over the next two years, despite significant headwinds from Asia Pacific, Latin America and the Middle East. These findings are part of the GBTA BTI Outlook - United States 2015 Q4.
“The U.S. business travel market is an island of stability in a sea of global volatility,” said Michael W. McCormick, GBTA Executive Director and COO. “Over the next two years, U.S. business travel spending will grow at just above 3 percent, but this is largely driven by price, not transaction level increases. In this environment of modest transaction growth, low inflation levels and global uncertainty – we can expect continued consolidation in the business travel industry.”
Overall, the GBTA Foundation business travel forecast found that the U.S. economy has returned to pre-Great Recession footing, but without the same speculative dangers that existed in 2007 and 2008. This bodes well for future U.S. business travel spending, which the GBTA Foundation predicts will grow at 3.2 percent in 2016 and 3.5 percent in 2017, reaching $299.9 billion and $310.4 billion, respectively.
Two key factors will limit further growth during this time:
- Business travel inflation in the United States has been at historically low levels due to a stronger dollar and plummeting oil prices. In 2015, price growth was the lowest witnessed since the Great Recession. In 2016 and 2017, price growth will return to normal – 2.6 percent and 3.0 percent respectively – but breakout potential will be limited.
- Business travel to international destinations will continue to face challenges from poor global macroeconomic fundamentals. While North America and Western Europe were two of the most stable regions in the world in 2015, Asia-Pacific, Latin America, the Middle East and Africa were a drag on global growth. This trend will likely continue in 2016 as well.
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