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October 25, 2016

Stats and Trends: U.S. Election Slowing Business Travel Growth


A new study from the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), suggests that the uncertainty surrounding the upcoming presidential election, as well as sluggish global expansion, low inflation, weak investment and choppy geopolitical conditions, are slowing business travel volume and spending growth. 

According to the GBTA Foundation’s latest forecast for business travel in the United States, total business travel volume is expected to grow only 1 percent this year, while spending could fall by 0.6 percent. In 2017, the GBTA forecasts spending to increase 3.8 percent, although that will largely be driven by price inflation. 

The report, GBTA BTI Outlook – United States 2016 Q3, cites three key drivers of business travel, all of which the GBTA describes as “mixed.” Indicators of business confidence remain weak but narrowly positive, which the GBTA said suggests a lack of enthusiasm for the near-term outlook. After-tax corporate profits fell for the fifth quarter straight in Q2 2016, which the GBTA said could translate to continued tighter expense controls, slow capital spending and constrained growth for the rest of the year. On the other hand, profits could become positive again in the second half of this year. Finally, weakness among key U.S. trading partners, combined with a strong currency, continue to drive down export performance, the GBTA said. 

“Businesses are hiring and paying better wages, but business travel spending is stalled – something we rarely see happen,” said Michael W. McCormick, GBTA executive director and COO. “The ongoing global uncertainty and added heartburn from a presidential election unlike any we have ever seen are causing many businesses to stay in a holding pattern, taking an extremely cautious wait-and-see approach bordering on paranoia.”

The report is available to members on the GBTA website

In terms of the presidential candidates, a separate study by black car service GroundLink of over 300 frequent business travelers saw respondents favoring Hillary Clinton over Donald Trump 66 to 33 percent. When asked “which candidate would be better for frontline airline, hotel, restaurant and car service and taxi drivers,” 64 percent of respondents picked Clinton and 33 percent picked Trump. 3 percent picked third party candidates. 61 percent of respondents also picked Clinton as the better traveling companion on Air Force One, versus 34 for Trump and 5 percent for third party candidates. 

The GroundLink survey also polled business travelers on what was the most pressing travel issue the new administration should focus on once elected. 62 percent of respondents picked terrorism and security, followed by 10 percent for the Transportation Security Administration (TSA) and security lines at airports, 9 percent for airport runways and infrastructure, nine percent for roads and highways, four percent for rail infrastructure and three percent for air traffic technology. 63 percent of those surveyed said that they believe the travel industry and the jobs it provides to the U.S. economy is “extremely important,” and 36 percent said it is “somewhat important.” 16 percent of those surveyed have donated money to one of the presidential candidates. 

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