According to an article published by NBC in November, 2013, business travel spending is supposed to rise in 2014. There's no way to tell what the rest of the year will bring, but so far NBC's prediction looks accurate.
The rising economy lends itself to an increased number of business trips. But it's not just the number of business trips that are going to force business travel spending up. As demand grows, airlines and hotel chains will be able to raise prices. Even if (or when) hotels extend their reach and build new buildings and chains, NBC also predicts that they will not be able to build enough new rooms to bring the prices back down to. This means that people traveling on business will be paying significantly more for transportation, flights, and hotels than they have in previous years.
The GBTA (Global Business Travel Association) expects that 2014's business travel rates will only continue to grow. Michael W. McCormick, GBTA executive director and COO, maintains that as spring and summer get underway, businesses will start sending their employees out more frequently. Hard winters tend to put a damper on consistent business travel, especially one with such snowstorms and dangerous conditions like the winter of 2013-2014. In April of 2014, the GBTA increased their predictions for business travel from 6.6% growth it predicted at the beginning of the year to 7.1%. International travel is expected to boom as well. In addition, more people are looking to combine business trips with pleasure. It is not uncommon for employees to extend their business trips by a few days in order to spend a few days sightseeing on their own or even bringing loved ones with them.
One potential crisis that may negatively impact these numbers comes with the increasing tension in Crimea. Europe has strong ties with Russia, and if a trade embargo affects their economy, North America could, in turn, be impacted. If Russia implements an oil and petroleum embargo, business travel expenses will skyrocket. This has the potential to negatively impact international business travel and send spending levels back down.
What Does This Mean?
If the GBTA and NBC are right and the number of business trips increases so dramatically, it means good things for the economy. Businesses can't afford to send their employees on business trips when the economy is weak, and after the recession of recent years, it will be good to see the numbers go back up. For more information about travel in Toronto and around the world, visit our home page.