Published on : Jan 13, 2015
According to a latest forecast report by the Global Business Travel Association, U.S. businesses have spent substantial amount of money on corporate travel in 2014. U.S. is now buoyed by a strengthening economy to be in the position to spend more.
Last year, U.S. companies spent around $292.2 billion on an increased number of business trips. However, as per the forecasts the industry will spend more than $310 billion, nearly 6.2% more in 2015.
Vice President of research, GBTA’s - Joe Bates said that they are at a very solid point in the economic recovery at present and thus businesses are getting really comfortable in sending their business travelers on the road. In most of the cases, businesses have relaxed their travel policies slightly allowing business travelers to enjoy on premium economy seating where they can spend some extra dollars to get higher level of comfort.
As compared to the previous year, the U.S. businesses have increased their trips abroad by around 6% despite the struggles in economies throughout Asia and Europe.
Nevertheless, the amount predicted to be spent on business trips outside the U.S. destination in the year 2015 are expected to rise by 7.9% in comparison to last year.
Bate mentioned that pent-up demands have risen. International corporate travel in 2012 in the U.S. had barely risen in the following year. But companies observe the need to tap into global markets to boost their profits and hence the rebounds. He also added that it was not a coincidence to come in conjunction with a stronger dollar, but to add to the confidence of businesses to put forth that this is the right time to bring the travelers on the road internationally.
Although fuel prices has plummeted the airlines industry, their savings onto consumers has not been passed on in the form of lower fares. According to the GBTA forecast, cheaper fuel will drive the airline ticket prices to drop by 0.9% in 2015.
Bate also added that they are seeking for greater revenues and are going to cut fares soon. Lower fuel prices will spur around 2.6% uptick in consumer spending this year.