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Business Travel Spending Set to Rebound

 

A new report released by the Global Business Travel Association (GBTA) predicts rising corporate profits and steady job growth should lead to a greater to increase in spending on business trips than was previously thought.

Earlier this year a rise of 6.6 percentage points was predicted by the GBTA. They have upgraded that figure by 0.5%, to 7.1% or $293.3 billion.

"The outlook for businesses is really strong, and the job numbers keep getting stronger,'' says Mike McCormick, GBTA's executive director and COO, who added that both factors are boosting the confidence of corporate managers. "Business travel drives business growth. If you see strong numbers here, that likely means good things for the U.S. economy for the rest of the year.''

Stormy Start

The storms and cold that we all experienced at the start of the year led to tens of thousands of flights being cancelled. This naturally had a direct effect on business travel, but the overall view is now better McCormack predicts: "It certainly has some impact," he says, "but on the whole, those kinds of impacts are relatively minor. ... Companies still need to accomplish their objectives. They tend to reschedule those trips quickly and get people back on the road. I think we'll have a very busy spring in terms of business travel in the U.S.''

Once of the most lucrative areas of business travel, the overseas long haul market should see a particular surge: "It makes sense because companies are looking for business opportunities anywhere they can in a global economy ... and that's been a big driver in overall business travel growth,'' McCormick says. While domestic business travel has also rebounded, "everybody is competing in a global marketplace, so they put people on the road.''

Possible threats

All that being said, the GBTA identified the effects on the European economy by further destabilization in Ukraine as a possible factor that could threaten the predicted growth.

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Posted on Jun 10 2014

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