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GBTA BTI™ Outlook – United States: 2013 Q2 (Select Pages)

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Business travel spending should continue to climb through 2013, driven in large part by growth in domestic travel spending. This is a notable shift from prior years when companies had to look abroad for business opportunities in the face of a sagging U.S. economy. Now, signs of a healthier domestic economy, including steady job gains and higher consumer confidence, are encouraging companies to increase their investment in domestic travel.

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GBTA BTI™ Outlook – United States: 2013 Q2 (Select Pages)

  1. 1. 2013 Q1 GBTA BTI™ Outlook – United States Prospects for Domestic & International Outbound Business Travel 2013-2014 2012 Q2 2013 Q2
  2. 2. 1515 GBTA BTI™ OUTLOOK – UNITED STATES e2013 Q2 © June 2013 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety for internal company use. Group Meeting & Convention vs. Transient Business Travel Our final 2012 revision led to higher totals for transient business travel – both person‐trips and spending. In 2012, there were a total of 282 million person‐trips taken for transient business travel. A total of $119 billion USD was spent on transient travel in 2012. This represents annual growth of 3.2% and 6.2%, respectively. This fairly robust level of growth has been challenged in early 2013, however, as the expansion in corporate profits has slowed. We expect that firms will continue to tighten their transient business travel budgets over the next few quarters. Our outlook for 2013 projects a ‐0.4% decline in Person‐Trip volume to 453 million trips and 3.8% growth in transient spending to $273 billion USD. By 2014, however, we expect another healthy uptick in corporate profits (and other economic drivers) and, consequently, both trips and spending will experience substantial growth. In 2014, we expect total transient volume to hit 130 million person‐trips and total transient spending to hit $284 billion USD, representing 1.1% and 5.2% growth, respectively. Group business travel metrics were also revised upward for 2012. Our final figures for 2012 show that group volume rose 0.5% to 166 million person‐trips and group spending rose 3.3% to $111 billion USD. Growth in spend‐per‐trip among group travelers, however, slowed as firms ratcheted down meeting budgets. Group business travel will continue to face headwinds through 2013 as trends that have emerged in the MICE industry, such as lower meeting budgets and more local meetings, will persist. Moreover, government meetings have been severely cut back in the wake of sequestration and the “IRS effect”. We expect total group volume to fall ‐0.3% in 2013 to 166 million Person‐Trips. Spending among group travel delegates will grow 5.3% to $117 billion USD in 2013. We are projecting slightly more growth in group meeting activity in 2014 when volume will grow 1.8% and spending another 6.8%. International Outbound Business Travel The quarterly growth in international outbound business travel volume bounced back slightly in 2013 Q1 after experiencing its worst drop since 2009 Q4 the previous quarter. We expect continued weakness in the global economy will further temper IOB in 2013 – volume will advance 0.9% and spending will grow 3.0%. We expect a significant turning point in international outbound business travel in 2014 as the global economy gets back on its feet and
  3. 3. 1414 GBTA BTI™ OUTLOOK – UNITED STATES e2013 Q2 © June 2013 GBTA and its affiliates. All rights reserved. Members may copy this publication in its entirety for internal company use.  2013 Q1 GBTA BTI™ came in at 123; this is somewhat higher than last quarter’s forecast of 121 (GBTA BTI™ Outlook – United States, January 2013), mainly due to the upward revision of 2012 data. This value represents a two‐point gain over the previous quarter and a three‐point gain over 2012 Q1.  The GBTA BTI™ has performed poorly over the last number of quarters, growing only 3 points since 2012 Q1. Tepid growth both domestically and abroad has continued to challenge the health of the business travel sector.  We continue to believe the GBTA BTI will experience significantly better growth over the next seven quarters. While economic headwinds in 2013 will weigh on both domestic and international business travel, price growth will help boost GBTA BTI™ over the next couple quarters. In 2014, we expect real spending growth to impact the GBTA BTI™ as travel price inflation stabilizes and both domestic and international trip volumes increase. Business Travel Quarterly Outlook Details Total U.S.-Originated Business Travel Spending & Trip Volumes3 The levels of our 2013 Q2 Outlook are significantly higher than our expectations from last quarter’s Outlook (Business Travel Quarterly Outlook – United States, April 2013), almost entirely due to the revision in our primary data source for domestic travel (volume and spend). Total business travel volume in 2012 was revised from 437 million annual person‐trips to 454 million annual person‐trips, nearly a 4% increase. Total spending on business travel in 2012 was revised from $256 billion USD to $262 billion USD, up over 2%. This represents a growth revision to 2.2% in trip volume in 2012 (up from ‐1.8% decline reported in last quarter’s forecast) and 4.4% in business travel spending (up from 1.8% growth reported in last quarter’s forecast). It should be noted, however, that these adjustments have done very little to alter the growth pattern in our forecasts for person‐trip volume or spending. We expect total person‐trip volume to fall slightly to 453 million trips (‐0.4%) in 2013 before rising 1.5% to 459 million trips in 2014. This compares with ‐1.1% and 1.8% growth for 2013 and 2014, respectively, projected last quarter. Total spending on U.S.‐initiated business travel is expected to rise 4.3% in 2013 and another 6.9% in 2014. 3 Includes all U.S. domestic business travel plus outbound international trips

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