. European Crisis Slowing U.S. Business Travel | Meetings & Conventions

European Crisis Slowing U.S. Business Travel

 Economic uncertainty in Europe is likely to impede the growth of U.S. business travel, according to the Global Business Travel Association BTI Outlook for the second quarter, released Tuesday. The report, sponsored by Visa, also pointed to domestic factors affecting the travel market, including low job growth, falling consumer confidence and retail sales, and slowing corporate profits. Evidence is mounting, too, that U.S. businesses might be waiting for the economic environment to stabilize before increasing investment in corporate travel. As a result, GBTA is significantly downgrading its travel forecast for the year, calling for growth of 2.2 percent for 2012. In the previous quarter, the association had anticipated U.S.-initiated business travel would grow 3.6 percent for the year. "Earlier this year, we created a number of shock scenarios modeling the potential impact of the European debt crisis on business travel here in the United States," said GBTA executive director and COO Michael W. McCormick in a statement. "In our Moderate Shock Scenario we predicted that a prolonged recession in Europe would result in a flattening of the business travel spending in the U.S. Unfortunately, it now seems that this shock scenario is becoming a reality." Nevertheless, the organization still expects travel spending to increase by 4.7 percent in 2013, to $268.5 billion. Specifically, GBTA forecasts transient travel spending will rise by 3.6 percent, group spending will grow by 5.1 percent and international outbound spending will increase by 7.2 percent. That's despite a slight drop (-0.7 percent) forecast in the number of trips. Should the European crisis worsen, that forecast would be downgraded, as well. However, McCormick noted that GBTA research indicates companies should not decrease travel spending as a result of economic uncertainty. "In addition to the damage that slashing travel spending will do to a company's bottom line," he said, "cuts to travel budgets could make a bad economic situation significantly worse due to business travel's impact on the overall economy."