As 2013 approaches we’re all involved in planning and forecasting for the new year. And in fact, the business travel industry tends to act as a “leading economic indicator.” As the economy improves, the travel industry actually grows ahead of many of the other economic measurements.
When CEOs, business owners, and other decision makers begin to feel bullish about the future, they tend to invest in travel to expand their markets, meet with their customers, and invest in training and other marketing opportunities.
Conversely, when business owners feel uncertain they become more conservative in investing in travel. This appears to be the current state of the economy. The combination of the ”Fiscal Cliff,” the European debt crisis, and the prospect of higher taxes has slowed business travel growth.
At Christopherson Business Travel, we are still growing but at a slower pace in the second half of 2012 as compared to the first half. Our ticketing transactions were up in the mid 20% range for the first half of the year and the growth rate has been tracking in the mid teens range in the second half of the year. This is still significantly higher than the industry average. U.S. travel agencies, as a group, processed 1.4 percent more air transactions in October than they did a year earlier.
This slower 2013 travel growth trend was confirmed in a recent Morgan Stanley survey of corporate travel managers. They found that a majority of corporate travel buyers expect to spend modestly more on air travel next year, with most projecting year-over-year increases in trip volumes and average airfares. “Executives indicated that budgets are expected to grow 1.3 percent in 2013 on a budget-weighted basis,” according to Morgan Stanley airline analysts.