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Buyers Expect Better Year for Business Travel, but Rising Rates and Tough Negotiations Looms Wednesday, February 13, 2013

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Companies in North America are more optimistic about business travel in 2013 but also bracing for higher travel costs only partially offset by modest budget increases.  Hotels, airlines and meetings venues will capitalize on growing demand to wield more power in negotiations with corporations that spend on business travel, according to travel buyers surveyed in the GBTA Foundation's 2013 Industry Pulse: Business Travel Buyers' Sentiment report. 

"Travel prices will be rising across the board, with international price growth especially robust as companies look abroad for opportunities," said Joseph Bates, GBTA vice president of research.  "Travel buyers are being pushed to balance higher costs, the need to get travelers on the road, and corporate budget constraints.  Strategic travel management programs will play a key role for companies dealing with a tougher negotiating environment and focused on getting the most out of their travel spending."  

Highlights from the report include:

• Buyers expect travel prices to increase substantially in 2013, from 4.6% for domestic economy airfare (to $492/trip) to 8.3% for international economy airfare (to $1,318/trip). 
• Hotel rates will also see marked increases, from 3.7% for domestic hotels ($161) to 8% for international ($297). 
• However, buyers expect just a 2.9% increase of their budgets – which will struggle to keep pace with projected rate hikes.  
• International travel prices will experience the largest price jumps, signaling healthy demand and a recovery in global business travel.  International travel spending should comprise 30% of total business travel budgets according to those surveyed.
• A majority of travel managers said higher rates (65%) and airline fees (60%) will be the top factors driving higher spending in 2013.  Two in five travel buyers (42%) believe that higher spending will be driven by more trips and 33% expect to spend more because they are putting more travelers on the road. 
• Travel buyers are gearing up for a challenging negotiating landscape with hotels, airlines and meeting venues.  In fact, nearly half of buyers (48%) think that negotiated discounts with hotels will be worse in 2013; 29% say the same about airline discounts and 28% about meeting venues.  
• Travel buyers are slightly more optimistic about the state of the economy: 37% feel it's doing better, 48% believe it's the same and only 15% say it's worse.  Half (50%) feel the economy will improve over the coming year and 47% believe the business travel industry will be in better shape as well.

Projected Travel Rate Increases:

The GBTA 2013 Industry Pulse: Business Travel Buyers Sentiment report surveyed 297 travel buyers in the U.S. in October 2012. The report is available exclusively to GBTA members by clicking here and non-members may purchase the report through the GBTA Foundation by emailing pyachnes@gbtafoundation.org.

About the GBTA Foundation

The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and corporate meetings organization.  Collectively, GBTA's 5,000-plus members manage over $340 billion of global business travel and meetings expenditures annually. GBTA provides its network of 21,000 business and government travel and meetings managers, as well as travel service providers, with networking events, news, education & professional development, research, and advocacy. The foundation was established in 1997 to support GBTA's members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbta.org/foundation.