GBTA Los Angeles is coming to a close! It was a wildly successful show for us at Lanyon. There was a lot of buzz over how we are trying to change the industry and merge the transient, meetings, and events worlds via our technology! There were a lot of great sessions, and we had several of our marketing folks sit in classrooms to listen and learn. In my blog space you will see a series of blog posts about the various sessions our people attended. Here’s the first one from our own Sherrina Peters, Manager of Marketing and Communications at Lanyon. Sherrina attended the session, GBTA BTI™ Outlook: United States, on Monday, July 28th. If you weren’t able to attend GBTA, here’s your chance to get the Cliff Note versions of the sessions, right here in this space. Enjoy!
Although there were many sessions to choose from at the Global Business Travelers Association Conference this year, I chose one focusing on the US outlook for business travel to get a better understanding of economic indicators and how they affect business travel. Through the use of GBTA BTI, a proprietary analytical tool, this session covered key economic indicators, expectations for business travel trip volume, international outbound business travel, and industry outlooks.
Ken McGill, Managing Director of Rockport Analytics, set the stage by helping the audience understand the methodologies and challenges behind the analytics. After four years of tracking business travel trips and spending (quarterly history), GBTA better understands what is happening in the business travel sector. BTI is the mathematical model that has come from this history and study.
The first area covered was the general US economic performance, as it relates to business travel. Although GDP was down 2.9% in Q1 of 2014, there are definitive increases in key indicators such as hiring, consumer, and household net worth. Because of these increases, there has been a steady increase in consumer durable goods purchases, with increases in retail sales, car purchases, and housing. In addition, corporate profits are also steadily growing since 2011. Further, there is a very high correlation between corporate profits and domestic travel. The overall sentiment is that consumers are driving spending across the US economy. Each of these numbers indicates healthy economic growth, setting the tone for an uptick in the meetings, events, and travel industries.
Another area that McGill covered in his presentation was international outbound business travel. In fact, there was a $1.4 billion increase in global travel in 2014, of which $273.7 million was business travel.
So, what is the outlook? Business travel spending jumped 6.8% this year alone. Over the next few years, expect an uptick of 2.3% in business travel spend — the best rate of growth since 2011. Group meeting trips and spending are forecast to expand 7.1% and 2.2%, respectively, this year.
We have a lot to look forward to in the meetings, event, and travel industries. Both economic and consumer spending habits are contributing to a very stable and growing marketplace.
Look for more reporting on GBTA BTI numbers every quarter in this blog!