GBTA BTI™ Outlook – United States: 2013 Q1
Statistics & Metrics
Date: April 9, 2013
About this Resource
An improving economic outlook with business and consumer confidence on the rise is expected to boost business travel in 2013, leading the Global Business Travel Association to upgrade its forecast for the year. Stronger corporate profits, increasing job development and improvements in key export markets are fueling business travel spending after a sluggish fourth quarter that was dampened by political uncertainty due to the "fiscal cliff" debate.
According to the GBTA BTI™ Outlook - United States 2013 Q1, a report from the Global Business Travel Association sponsored by Visa, Inc., U.S. business travel is now expected to rise 5.1% in 2013 to $268.5 billion, which is an upgrade from the 4.6% growth to $266.7 billion that GBTA predicted last quarter and a substantial increase from 1.8% growth in 2012.
• GBTA's forecast upgrade will be driven in part by stronger growth in group spending, which is now expected to increase 6.0% to $115.9 billion - up from 5.2% growth forecast in Q4.
• GBTA's outlook for trip volume remains essentially the same from last quarter - a slight decline of -1.1% to 431.7 million person-trips.
The GBTA BTI™, a proprietary index of business travel activity, is now estimated to reach 121 in Q1 2013. This means the BTI would finally exceed its pre-recession high of 120 and mark a comeback from its low of 97 in Q4 2009.
The BTI is expected to continue rising for the rest of 2013, reaching 126 by the end of the year.
The report uncovered a strong correlation between stock prices and business travel spending, revealing that stock prices historically lead trip volume by 1-2 quarters (as shown in the chart below). With the market hitting record highs in Q1, business travel should be poised to pick up additional momentum throughout the second half of 2013. This is a good sign, indicating what GBTA believes will be an improving environment for business spending and hiring.
Notably, job development is now on the rise in industries that tend to require more business travel such as business services, finance, and utilities. This is a marked shift from late last year when job creation favored less travel-prone sectors like retail and restaurants.
The GBTA BTI™ Outlook - United States projects aggregate business travel trends over the next eight quarters. The report includes key buy-side metrics such as total business travel volume and spending, plus supply-side projections of changes in costs, across both transient and meetings travel. GBTA BTI™ Outlook - United States 2013 Q1 is the eleventh report in the series. Releases are published on the second Tuesday of each quarter.