Alexandria, VA — An uncertain upcoming U.S. presidential election, sluggish global expansion, low inflation, weak investment and choppy geopolitical conditions continue to shackle business travel volume and spending growth, according to the GBTA Foundation’s latest business travel forecast. The GBTA Foundation is the education and research arm of the Global Business Travel Association (GBTA).
Total business travel volume in the U.S. is expected to rise just 1% in 2016, while spending is projected to fall by 0.6%, according to the GBTA BTI Outlook – United States 2016 Q3.
In 2017, GBTA predicts spending will increase 3.8% reaching $293.1 billion, largely driven by price inflation. The report also cites three macro-drivers of business travel that continue to provide mixed signals:
. Business confidence – In general, indicators of management confidence remain weak, but narrowly positive suggesting a definitive lack of enthusiasm for the near-term outlook.
. Corporate Profits – After-tax profits fell for the fifth consecutive quarter in 2016 Q2, and although they appear poised to return to the plus side during the second half of 2016, expect the continuation of tighter expense controls, lethargic capital spending and constrained business travel growth for at least the rest of the year.
. International Trade – Weakness among key U.S. trading partners combined with a strong currency continues to plague export performance.
Indicators point to a better, but still-modest 2017 for the U.S. economy with 2.4% GDP growth. “Businesses are hiring and paying better wages, but business travel spending is stalled – something we rarely see happen,” said Michael W. McCormick, GBTA Executive Director and COO. “The ongoing global uncertainty and added heartburn from a presidential election unlike any we have ever seen are causing many businesses to stay in a holding pattern, taking an extremely cautious wait-and-see approach bordering on paranoia. This begs the question of whether many of these companies will be ready when growth does re-accelerate. To be prepared for lasting business growth, companies must be ready with the newest technologies, the most productive workforce and the critical customer relationships necessary to take full advantage.”