2014 was an extremely strong year for the business travel industry overall, as companies spent an estimated $292.2 billion in 2014 on travel expenses, according to the Global Business Travel Association. But researchers are pointing out that 2015 is shaping up to be the biggest spending year for business travel in U.S. history.
Record year projected for U.S. business travel
The GBTA issued a report that predicts a 6.2 percent increase in business travel spending for U.S. companies, potentially reaching upward of $310.2 billion in 2015. If spending were to reach this figure, it would be a record-setting year for the U.S., at a time when other countries around the world are experiencing significant reductions in travel spending.
The report published by GBTA uses an econometric model created by Rockport Analytics, one of the leading global market research and insight providers in the U.S., which calculates business trip volume and spending and delivers its financial projections every second Tuesday of each quarter. Another one of the primary projections provided by the report was the overall increase in total business trips taken by employees, which is expected to jump from 482.2 million trips taken in 2014 to 490.4 million in 2015, a 1.7 percent increase.
Michael W. McCormick, the executive director of the GBTA, described the strengthening of the U.S. business travel economy in recent years, which has been one of the few countries to report increases in business spending as the global economic recession has hit the travel industry hard throughout the world.
“2014 was a stabilizing year for U.S. business travel, with continuous, sustained growth, despite a plethora of external issues internationally that have weighed down economies in Europe, Russia and Asia,” McCormick said in a statement. “This is a significant and encouraging sign of confidence in the strength of the U.S. economy.”
“This is a significant and encouraging sign of confidence in the strength of the U.S. economy.”
Global business travel remains in decline
The report was adamant about how the rest of the world seems to be spending less on business travel than ever before. Russia was described as “barely treading water” when it came to how its overall economic state impacts its business travel, and while China and Japan continue to emerge as some of the leading traders in various industries, their international travel numbers for business-related ventures remain essentially stagnant.
Record low oil prices
What’s interesting to note is that as business travel numbers around the world continue to decline, oil prices have been recorded at all time lows for the past year. This has also caused airline prices to dramatically drop in 2014, which the researchers consider to be one of the primary factors in regard to the increase in U.S. spending on business travel. The GBTA projected that overall U.S. consumer spending on gas would increase by 2.6 percent in 2015, signaling that road trips may also become a more-utilized travel option for companies.
Business travel outlook
One of the analyst’s predictions with the continued increased spending in U.S. business travel is that companies seem to be becoming more lax when it comes to their budget restrictions. This may come as good news for employees who are in dire need of extra legroom on flights or a luxury upgrade on their rental car. Joe Bates, the vice president of research for the GBTA, elaborated on this potential perk for employees further.
“We’re at a really solid point in the economic recovery right now, so businesses are feeling comfortable sending their business travelers on the road,” Bates told USA Today. “In some cases we’re seeing businesses start to relax their travel policies a little bit, allowing travelers to have premium economy seating, spending those extra dollars for that higher level of comfort.”
International business travel is also supposed to significantly increase in the U.S. for 2015, with a whopping 7.9 percent increase expected to take place in the number of global flights booked by companies. If the projections of the report shape up, 2015 is indeed looking to be a booming year for the business travel industry.