Euro debt crisis could wreck havoc on US biz travel
If the European debt crisis grows significantly worse it would wreak havoc on US business travel, according to new research from the Global Business Travel Association Foundation (GBTA).
"The study finds that a moderate worsening of Euro debt crisis would hamper business travel growth while a more extreme scenario would lead to full-on retraction," said the report.
Under what it calls an "extreme scenario" — which includes the possible dissolution of the European Union — could result in a 9% decline in trips and 16% drop in spending – a loss of nearly $88 billion.
Said Michael W. McCormick, executive director and COO, GBTA:
"This data serves as a wakeup call to the entire industry as we watch European policy makers work to contain the debt crisis. While these problems are happening abroad, they most certainly can have an effect at home."
The research identified three different scenarios for the European debt crisis:
Baseline/Current Scenario: A mini-recession in Europe, which is already expected, would be short lived and would result in continued growth in US business travel spending at $263.5 and $277.3 billion in 2012 and 2013 respectively. The number of trips taken is also projected to grow slightly at 443.1 and 443.6 million trips in 2012 and 2013 in the baseline situation.
Moderate Scenario: A prolonged recession in Europe would result in business travel growth flattening with a reduction in spend of almost $40 billion (-7%) and roughly 42 million trips (-5%) forecast between 2012 and 2013.
Severe/Extreme Scenario: Widespread debt and banking failures across the Eurozone and possible dissolution of the European Union would push spending back to levels not seen since the Great Recession with a reduction of spend of nearly $88 billion (-16%) and trip volume by over 76 million trips (-9%) forecast between 2012 and 2013.
By David Wilkening
David
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