If you want an indication of where the economy is going, look for business travelers the next time you fly or check into a hotel.
The more companies spend on business travel, the more likely the economy is inching closer to a recovery, and a new report hints at that very possibility for 2012.
On Tuesday, the Global Business Travel Association (GBTA) released its latest Business Travel Quarterly Outlook, which monitors business travel spending among U.S. companies. According to the report, spending on business travel is expected to top $263 billion dollars this year, an increase of 4.6 percent over last year.
“We’ve hit the reset button from pre-recession levels,” said Michael McCormick, executive director and chief operating officer. “We’re back at the level we were at in 2007.”
Alas, it’s not all good news as most of the increase is expected to come from rising travel costs rather than an increase in the number of trips taken. While the number of trips business travelers took in 2011 was up 2.1 percent over the year before, GBTA predicts they’ll post a slight decline of 0.8 percent this year.
Nevertheless, says McCormick, the fact that businesses are spending money on travel is itself a positive sign — not just for businesses but for the travel industry and the nation.
“Business travelers are a big driver of the economy,” he told msnbc.com. “The amount of revenue dollars and tax dollars that are created by business travelers being out there is a great way to measure the health of the economy.”
Recent research from Deloitte LLP provides some cause for optimism. In September, the market research and consulting company conducted a survey of 1,000 business travelers and 85 percent of respondents said they expected to take the same number or more trips in 2012 than in 2011.
According to Adam Weissenberg, vice chairman of global travel, hospitality and leisure at Deloitte LLP, much of that bullishness can be traced to Gen X and Gen Y business travelers. While only 16 percent of respondents ages 45 and older are planning more trips this year, 27 percent of those between 18 and 44 expect to travel for work.
“Gen X and Gen Y travelers are making up more of the workforce and they’re also more optimistic,” said Weissenberg. Furthermore, their influence is becoming increasingly apparent, he told msnbc.com, as hotels renovate formal lobbies into friendlier, social venues; airlines offer more online and mobile services; and more “lifestyle” restaurants offer a middle ground between fast-food and waiter service.
Such changes, of course, won’t happen overnight, just as the improving economy is proving to be a slow-motion affair. In the meantime, both McCormick and Weissenberg maintain that as business travel goes, so goes the larger economy — at least eventually.
“There’s typically a lag between business travel and the economy,” said Weissenberg. “Historically, heading into a recession, [the drop in] business travel is about six months behind because people have already booked plane tickets, set up meetings, paid fees for conferences. That doesn’t change overnight.”
Conversely, as companies begin to see signs of economic growth, they gradually become more optimistic to the point that they start sending people back out on the road. According to GBTA, business travel typically lags the economy by a quarter (of a four-quarter year), which suggests the effects of that optimism will start to show up this spring or summer.
“What we’re seeing now is that 2012 is looking better than 2011,” said Weissenberg. "Clearly, it’s a good sign.”
The more companies spend on business travel, the more likely the economy is inching closer to a recovery, and a new report hints at that very possibility for 2012.
On Tuesday, the Global Business Travel Association (GBTA) released its latest Business Travel Quarterly Outlook, which monitors business travel spending among U.S. companies. According to the report, spending on business travel is expected to top $263 billion dollars this year, an increase of 4.6 percent over last year.
“We’ve hit the reset button from pre-recession levels,” said Michael McCormick, executive director and chief operating officer. “We’re back at the level we were at in 2007.”
Alas, it’s not all good news as most of the increase is expected to come from rising travel costs rather than an increase in the number of trips taken. While the number of trips business travelers took in 2011 was up 2.1 percent over the year before, GBTA predicts they’ll post a slight decline of 0.8 percent this year.
Nevertheless, says McCormick, the fact that businesses are spending money on travel is itself a positive sign — not just for businesses but for the travel industry and the nation.
“Business travelers are a big driver of the economy,” he told msnbc.com. “The amount of revenue dollars and tax dollars that are created by business travelers being out there is a great way to measure the health of the economy.”
Recent research from Deloitte LLP provides some cause for optimism. In September, the market research and consulting company conducted a survey of 1,000 business travelers and 85 percent of respondents said they expected to take the same number or more trips in 2012 than in 2011.
According to Adam Weissenberg, vice chairman of global travel, hospitality and leisure at Deloitte LLP, much of that bullishness can be traced to Gen X and Gen Y business travelers. While only 16 percent of respondents ages 45 and older are planning more trips this year, 27 percent of those between 18 and 44 expect to travel for work.
“Gen X and Gen Y travelers are making up more of the workforce and they’re also more optimistic,” said Weissenberg. Furthermore, their influence is becoming increasingly apparent, he told msnbc.com, as hotels renovate formal lobbies into friendlier, social venues; airlines offer more online and mobile services; and more “lifestyle” restaurants offer a middle ground between fast-food and waiter service.
Such changes, of course, won’t happen overnight, just as the improving economy is proving to be a slow-motion affair. In the meantime, both McCormick and Weissenberg maintain that as business travel goes, so goes the larger economy — at least eventually.
“There’s typically a lag between business travel and the economy,” said Weissenberg. “Historically, heading into a recession, [the drop in] business travel is about six months behind because people have already booked plane tickets, set up meetings, paid fees for conferences. That doesn’t change overnight.”
Conversely, as companies begin to see signs of economic growth, they gradually become more optimistic to the point that they start sending people back out on the road. According to GBTA, business travel typically lags the economy by a quarter (of a four-quarter year), which suggests the effects of that optimism will start to show up this spring or summer.
“What we’re seeing now is that 2012 is looking better than 2011,” said Weissenberg. "Clearly, it’s a good sign.”
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