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Did U.S. Business Travel Benefit From a Trump Bump?

Skift Take

Unexpected business travel growth in the U.S. is good news for the travel industry — but will it last?

— Hannah Sampson

Business travel in the United States got a surge of life in November, countering expectations that it would decline.

The monthly Travel Trends Index from the U.S. Travel Association and Oxford Economics, released Tuesday, said all sectors of travel grew above their six-month moving averages in November. It was the first index out since Donald Trump won the U.S. presidential election, and an announcement about the results suggested that a post-vote “Trump Bump” could have had something to do with the uptick.

“Although we are optimistic about the prospects for travel under the new administration, frankly we were prepared to see a wary short-term reaction, particularly in demand for inbound international travel to the U.S.,” U.S. Travel Association president and CEO Roger Dow said in a statement. “Not only has no downturn materialized, but we have seen surprising strengthening in some areas, particularly the long-foundering domestic business travel segment. It mirrors the strong upticks we have seen in the stock market and a number of other indicators.”

Domestic business travel spent much of last year showing year-over-year declines, and that trend was expected to continue into 2017. So any growth in late 2016 was a welcome surprise. The report says there is a “positive yet modest outlook” for domestic business travel thanks to higher business investment spending.

“While uncertainty still looms, and much is dependent on the President-elect’s policies, the equity market has reacted favorably immediately following the election outcome,” the report says.

As expected, domestic leisure travel had the strongest gains in November. That sector is expected to lead industry growth into the early part of the year; travel bookings, searches, and vacation intentions were stable in November for leisure-related travel, the report said.

Domestic travel — both business and leisure — is expected to grow at a rate of a little more than 2 percent through May compared to the same timeframe last year. The report credits consumer spending and a “healthy” labor market for the increase.

But international inbound travel — which grew in November, although more slowly than the previous month — is expected to dip in the coming months. That’s due in large part to the strength of the dollar.

Total travel volume is forecast to grow about 1.8 percent through May.

“Global growth is expected to improve in the coming months,” Adam Sacks, president of the tourism economics group at Oxford Economics, said in the report. “Though the outlook for the international market remains cautious due to the still strong dollar and political uncertainty.”

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