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Cautious corporations expected to keep business travelers at home in first half of 2013

Jan 09, 2013 1:29 am

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Hotels, airlines, and car rental companies are compensating for the expected drop in business travel by slightly increasing rates to ensure a steady bottom line.

— Samantha Shankman

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Michal Osmenda  / Flickr

Passengers wait for their flights at Dublin Airport. Michal Osmenda / Flickr


Fewer business travelers are likely to hit the road this year as the travel industry is challenged by corporate America’s persistent economic fears.

Business travelers are expected to take 431.8 million trips in 2013, the Global Business Travel Association said Tuesday. The industry trade group had forecast 435 million trips back in July.

The latest estimate would mean a 1.1 percent decline from the 436.5 million trips taken in 2012.

Fewer people traveling, however, doesn’t mean lower costs. Airfare, hotel rooms, meals and car rentals have helped to push up the overall price of business travel.

In 2012, business travelers spent $254.9 billion, up 1.6 percent from the prior year. This year, the travel association expects another 4.6 percent increase to $266.7 billion. That’s down slightly from the $268.5 billion predicted back in July.

Worries over the tax and budget battle in Washington were blamed for some of the 2012 declines. Now that tax changes have been approved, the business travel group is cautiously optimistic that travel will improve.

“Even with an agreement to avert the fiscal cliff in the near-term, there are still many issues that need to be addressed; however, companies should now have somewhat greater confidence in their spending decisions,” Michael W. McCormick, executive director of the group said in a statement.

He expects conditions to improve in the second half of the year, when “pent-up demand to get back on the road should hopefully fuel accelerating growth in business travel spending.”

Travel to Europe will likely decline due to ongoing economic problems, but the travel association says that a stronger Chinese economy will help boost international trips.

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