Business Travel Spending Increased In 2011
Adding to the continuing stream of modest improvements to the economy, business travel expenditures are up across the country, according to The Federal Reserve's Beige Book.
The report, which pulls data from 12 districts -- Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco -- noted that most districts had "solid gains or high levels" of travel and tourist activity, in both business and leisure. Two districts, Atlanta and San Francisco, reported business travel levels that were well above rates from a year ago. Boston, which projects a 5 to 8 percent growth in travel spending, expects to see double-digit growth in hotel revenues for this year as well.
In a more focused look, trade group Global Business Travel Association reported that business travel in 2011 performed much better than expected. Person-trip volume for the year is up 2.1 percent, with $446.5 million in spending, and total spending on business travel is up 7.6 percent to $251.9 billion.
The association predicts that business travel spending will increase by a steady 4.6 percent in 2012. "Because business travel drives corporate growth, we should expect road warriors to remain busy in 2012," Michael McCormick, COO of GBTA, said in a statement.
In another promising estimate, GBTA predicts that travel inflation will drop to 2.2 percent in 2012, an improvement from the 4.3 percent rate in 2011.
While travel index predictions for 2012 are to reach the pre-recession high of 120, a large sector of business travel may be ill effected by economic turmoil in Europe. While international outbound travel from the U.S. remains stronger than domestic travel, GBTA foresees issues in the Eurozone will slow growth. And though 2011 saw a 3.2 percent increase in U.S.-initiated international business travel, 2012 numbers are lower, with an expected growth of only 2.4 percent.