It looks like, despite a record-breaking winter when the polar vortex and back-to-back snowstorms halted travel across much of the U.S., business travel is expected to continue its surge in 2014. The Global Business Travel Association (GBTA) recently increased its forecast for the year, driven in large part by healthy corporate profits, rising management confidence and increased job development – all positive signs for the U.S. economy.
U.S. business travel spending is now expected to rise 7.1% in 2014 to $293.3 billion, a substantial upgrade from the 6.6% growth that GBTA predicted last quarter. Total person-trip volume is expected to increase 2.0% to 464.7 million trips, according to the GBTA BTI™ Outlook – United States 2014 Q1.
– GBTA’s forecast upgrade will be fueled by strong investment in international outbound travel spending, which is now expected to increase 12.9% to $37.2 billion – up from 12.5% growth forecast in Q4.
– GBTA’s outlook for group travel was also revised to increase 7% in 2014 to $126 billion – up from the 6.5% growth GBTA predicted last quarter.
So what does this mean for travel managers and meetings/events? It means that you need to revisit annualized budgets and spend forecasting — in order to not be “surprised” by executive directives to cut travel and meetings due to the increase in spending and costs. These increases will affect demand as well as continue to enforce the supplier advantaged marketplace. Negotiations with key suppliers will continue to be challenging and companies who are not practicing solid SMMP disciplines will be further behind the eight ball in terms of spend management and cost containment.
Now is the perfect time to demonstrate to your executives that you are proactively managing your business category(ies) strategically and not reacting to the marketplace. In these challenging times, in order to survive, those who are strategic and forward-looking will prevail.
How are you thinking and planning strategically in 2014? Please share here.