The Washington Post,
NEW YORK — U.S. companies are continuing to cut back on employee travel
plans amid uncertainty surrounding the health of the economy.
Americans are expected to take 438.1 million business trips this year,
down 2 percent from last year, the Global Business Travel Association said
Tuesday. Overall business travel spending is expected to be up 2.6 percent, but
that’s only because trips are more expensive.
“Corporations are in a wait-and-see mode and holding back on investment
decisions that would help boost the economy,” said Michael W. McCormick, the
trade group’s executive director and chief operating officer.
The group cites a lack of significant job creation in the sectors that
would spur business travel and worries about whether a package of steep tax
increases and sharp government spending cuts can be avoided as major factors
hurting business travel plans.
The economy is adding jobs and the unemployment rate recently dipped
below 8 percent for the first time in four years. But jobs have been
concentrated in sectors like retail, restaurant and manufacturing — areas where
employees don’t tend to travel much. As a result, business travel is not
getting the bounce that was typical of past recoveries.
The travel group said fears of the so-called “fiscal cliff” scheduled to
kick in at the beginning of next year without action to stop it are “the
darkest cloud” on the economic horizon. It predicts the economy will slide back
into recession if government officials don’t soften the blow.
“This is an economy in need of some good news to shore up business
confidence and encourage more travel,” McCormick said.
Next year, the outlook for business travel is somewhat brighter. GBTA
forecasts total spending will rise 4.9 percent to $270 billion, a slight
increase from their forecast three months ago. Total trips, though, are
expected to fall 1.1 percent.
The organization expects trips from the U.S. overseas will also be
constrained by worries overseas, including recession in Europe and slower
growth in China.
GBTA projects international outbound spending to grow 2.5 percent this
year. Less than a year ago, GBTA forecast growth of more than twice that.
Hesitation among business travelers is hurting airlines, who count on
the well-heeled set to hold up their bottom lines. Business travelers tend pay
more because they tend buy airline tickets closer in to their departure date
than vacationers. They’re also, of course, more likely to sit in the front of
the plane.
On Monday, United Airlines said traffic and passenger revenue fell in
September. United, the world’s largest airline, is operated by United
Continental Holdings Inc. Passenger revenue, which measures how much money the
airlines make from fares and fees, either declined or rose less than expected
among major carriers last month.
No comments:
Post a Comment