The Global Business Travel Association released its 2016 Q4 GBTA BTI U.S. Business Travel Outlook today, but did so with a number of caveats. The quarterly forecast, which projects a 4.4 percent increase in business travel spending this year, for a total of $296.1 billion, was completed after the election but before President Trump took office.
"The forecast is now very much in jeopardy," said GBTA executive director and COO Mike McCormick. "This will be especially true if we continue to see losses like we witnessed in the week following the travel ban."
Two weeks ago, the GBTA estimated
that approximately $185 million in business travel bookings were lost in the week following the Trump administration's executive orders and travel ban.
"The current state of uncertainty over the travel ban could cause a similar impact on business travel," added McCormick. The Trump administration has indicated that a revised executive order will be forthcoming, and it remains unclear whether the president will rescind the original order, which has been blocked from being implemented by the courts thus far.
McCormick pointed out that international outbound business travel had already been identified as a weak point before the travel ban was signed. That's precisely the type of travel that was most vital in driving economic recovery in recent years, as U.S. companies sought global business opportunities.
The forecast also looks at a number of policies named by Trump as priorities for his first 100 days in office, and what effect they might have on business travel. "Ultimately, the direction of these policies will be the largest drivers of business travel performance over the forecast horizon - and currently things are not looking promising," added McCormick.
Trump policies that could positively affect business travel include lower corporate tax rates, which could boost business spending and investment; lower business regulation, which could support better efficiency and bottom-line corporate growth; and increased infrastructure spending, which could stimulate the domestic economy in the short run and make the U.S. more competitive in the long run.
Policies with a potentially negative effect on business travel include a protectionist trade policy, which could "drastically restrict the free movement of goods, services and people around the world," noted McCormick; and cutting the federal workforce, which could negatively affect government travel.
"The concern lies in whether or not the positive impacts from the previous policies will be outweighed by the potential negative impacts of the latter policy priorities," said McCormick. "In the short term, GBTA urges President Trump and his administration to make clear their intentions around restricting travel moving forward. Uncertainty is bad for business and bad for the economy."
Security efforts should focus more on expanding programs that facilitate information-sharing and screening, McCormick added, and less on closing U.S. borders. "The ultimate concern is that the lasting impact of the travel ban, and any future appeals around it, could cause other countries beyond just those named in the ban to think twice about planning meetings and events in the United States," he said. "This could create a huge impact, as each inbound international business trip increases U.S. merchandise exports to the visited country by $36,000 per year, and each overseas traveler spends approximately $5,000 when they visit. Closing our borders sends a message to the world that the United States is closed for business."