US business travel spending to rise with foreign trips
Optimistic the economy will continue to improve, U.S. business travel spending is expected to climb more than earlier forecasts, boosted by an increase in outbound international travel, mainly to Western Europe.
The new Global Business Travel Association quarterly report, released Wednesday, predicts U.S.business travel spending will rise 6.6 percent to $289.8 billion in 2014, up from a 3.8 percent growth rate in 2013. Looking at just international travel spending, the increase is expected to hit 12.5 percent (to $36.7 billion), which followed a 1.8 percent growth rate in 2013 and a mere 0.8 percent rise in 2012.
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"International outbound travel is the driver" of the increase, Mike McCormick, the executive director and chief operating officer of the association told CNBC in an interview Tuesday. And because an international traveler tends to spend more on airfare and hotels, on a per-person rate, overall spending goes up.
Overall, the number of business trips will increase, even domestically, but still with an eye on the cost. The uptick in spending doesn't so much mean a loosening in terms of travel policies, but a willingness to invest in putting more people on the road, McCormick said.
And although spending on business travel is starting to increase, it's far from a return to three martini lunches and a surf and turf with the clients. "We may not see that again in our lifetime," he said. "We may have to save that for the 'Mad Men.' "
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The full report, the "GBTA BTI™ Outlook – United States 2013 Q4," comes with a caveat. "If our elected officials have finally gotten the message that political uncertainty and brinksmanship stifles economic growth, we should be looking at a very healthy year for U.S. business travel," McCormick said in a statement issued with the report.
"Airports and hotels will be busy as American companies gain confidence and invest in travel to drive growth. And because business travel is a leading indicator of employment, this news is also another positive sign for the labor market."
The longer-term optimistic view is reflected in the strengthening of bookings for group travel, which usually entails a longer lead time. While this sector has been rising for two years, the GBTA now expects group travel spending to rise by 6.5 percent in 2014 to $124.5 billion, with a volume increase of 1.7 percent.
On the other side of the Atlantic, a survey from the Business Travel Show also shows optimism. The survey of mainly U.K.-based travel procurement managers forecasts 76 percent of airline budgets will hold steady or rise in 2014, while 74 percent of budgets for hotels will rise or stay the same.
The rebound can't come soon enough for Sheraton Hotels & Resorts, which spent the recession renovating more than 200 properties' club-level rooms and lounges with amenities such as more technology, partitionable meeting space and improved food and beverage offerings.
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The company planned the renovation in 2007 and built it out "in anticipation of the recovery," said Hoyt Harper II, the senior vice president and global brand leader at Starwood's Sheraton properties.
The hotels are seeing a "travel resurgence fueled by corporate- and high-end leisure travel," he said.
—By CNBC's Amy Langfield. Follow her on Twitter at @AmyLangfield.
Follow Road Warrior on Twitter at @CNBCtravel.