Travel rebound expected next year
The recent and often quoted bad news: business travel will be down 15 percent this year. But the latest good news is that it will recover next year, according to HIS Global Insight.
They predicted a 1.2 percent annual growth rate in the five years through 2013 in a study with the National Business Travel Association sponsored by Egencia.
At the same time, there were signs that the overall travel market may be on the mend.
News of Cathay Pacific flying back into the black raised hopes, albeit the return to profit was made on the back of fuel-hedging gains which offset declines in passenger and cargo demand.
"There is still no sign of early recovery," said Cathay Pacific Chairman Christopher Pratt. "The best we can say at the moment is the worst may now be over."
Also beating expectations is online travel agency Orbitz WorldWide, which posted a second-quarter profit, helped by increased booking transactions and cost-cutting that offset declines in demand.
Chief Executive Barney Harford also believes the worst declines in demand are in the past. He said:
"What we’re seeing is stabilization in terms of demand. We’re seeing stabilization in terms of average daily rates on hotels. But I don’t think we’re seeing any major signs of any kind of uptick."
As for the business sector, Ken McGill, NBTA research consultant and lead analyst on the IHG Global Insight report, said:
"As we come out of the recession late this year and into 2010, we will not achieve the growth rates that we saw in 2006 and 2007 period. The recovery, in an economic sense and a business travel sense, is tepid. The global recovery is going to take time."
Nearly every industry or sector is expected to show decreased levels of business travel spending in 2009 versus last year, "reflecting the global recession," according to an NBTA statement.
NBTA and IHS Global Insight expect most sectors by next year to start rebuilding business travel spending levels, at an average growth rate of 4.2 percent over 2009.
"Over the next five years, sectors that directly benefit from both infrastructure development (utilities, government and communications) and economic stimulus packages (education, construction and real estate) will experience the most significant growth in business travel spend," the researchers reported.
And the future of business travel? On the increase everywhere for many solid reasons, the report found.
"When you look at the multinational corporation and the globalization, I foresee many people’s travel increasing because when you are dealing with people from another country, you’ve got communication issues and personality issues," said incoming NBTA president Craig Banikowski. He added:
"So you are going to have to accomplish a lot more with a face to face meeting initially, and then perhaps be supported by technology on the back end."
By David Wilkening
David
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