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To hell with conference calls. U.S. corporations are sending their employees on more international trips, and that’s a great sign for the travel industry as it reflects growing confidence in the economy.
The polar vortex and harsh winter may have sucked some life out of business travel earlier this year, but the Global Business Travel Association revamped an earlier forecast and now estimates U.S. business travel spending in 2014 will rise more than it previously forecast.
Fueled by ample corporate profits, an uptick in business confidence, job creation, and a boost in international trips, the GBTA now projects that U.S. business travel spending will increase 7.1% to $293.3 billion in 2014, and that’s “a substantial upgrade” from the 6.6% growth projection it made during the first quarter
U.S. business travel spending for international outbound travel in 2014, the GBTA forecasts, would jump 12.9% to $37.2 billion, and that’s up from the GBTA’s 12.5% rise that it estimated during the fourth quarter.
The upbeat forecast comes on the same day that American Airlines reported that operating profit took a $60 million hit because of the severity of the winter storms.
Still, GBTA’s revised forecast likely will be welcome news for American and other U.S. carriers.
“As the spring thaw gets into full swing businesses are feeling more confident, with pent-up demand to get their employees back on the road,” said Michael W. McCormick, GBTA executive director. “Business travel growth is a leading indicator of job growth, and we’ve seen this play out in previous quarters as the private sector has finally regained all of the jobs lost during the recession.
“Today’s forecast, McCormick added, “suggests that this measured but steady improvement should continue.”