As 2010 winds down, major business travel researchers are rolling out their forecasts for the next year and beyond. They agree on a few things.
Most notably, they say, business travel in 2011 is expected to continue its rebound from the moribund levels of late 2009, when there was a dip of nearly 15 percent in total U.S. spending from the previous year. The enthusiasm is tempered by a few stark realities that will keep the industry from being as flush as it once was.
Tighter controls on expenses will make for a new playing field even as business travel, in terms of trips and spending, is expected to increase (though the rate of increase in spending is expected to outpace the rate of increase in total trips).
American Express predicts that airfares and hotel rates will rise as much as 10 percent in the next year, while car-rental rates will remain flat or inch down slightly. More traveling and more people competing for a limited number of seats and beds means pricing power will be in airlines' and hotels' favor. In many cases, these costs will return to prerecession levels.
Companies are expected to increase spending on meetings, Amex says. But that spending will come in more meetings at regional levels rather than big-city opulence.
The National Business Travel Association predicts a 3.8 percent rise in business travel in 2010 over 2009 and expects rises of 6.7 percent and 6.9 percent in 2011 and 2012, respectively. The industry last peaked in late 2007 and was expected to reach those levels again by late this year.
Despite the expected growth, the recent recovery has lost some momentum, and growth prospects for 2011 and 2012 "remain muted," according to the association report. This is the result of sluggish household income growth, lingering high unemployment rates, and a still-struggling housing sector.
Finally, travel management company Egencia is making predictions a bit more in the consumer's favor. That Expedia-owned company says average ticket prices for many of the most popular corporate travel destinations will remain relatively flat or see only slight increases.