Business Travel to Continue Growing Despite U.S. Economic Slowdown

At the NBTA Business Travel Financial Forum analysts predicted that the economic slowdown in the United States will not last long. The forum, held last week in New York, gave 215 travel managers and supplier participants a “Wall Street Look at the Business of Business Travel.”

Ken McGill, Executive Vice President & Managing Director, Travel & Tourism, for economic analysis firm Global Insight, said that the United States is currently in a recession, which he labeled as “mild,” but that the negative growth will last only two consecutive quarters (a recession is generally defined as two consecutive quarters of negative growth).

McGill indicated that the globalization of business will play a significant role in keeping the recession short. He said, “The global economy is both robust and broadly distributed,” and the interplay between growing and slowing economies around the world will help the U.S. economy recover quickly.

He also predicted that both increases in fuel prices and decreases in the value of the dollar would moderate in the medium term, contributing to recovery. “The global economy is a good-news story: slowing growth, then getting back on track,” he added.

The airline industry, however, will likely face a longer down period than the broader economy, according to Randy Babbitt, Director of Oliver Wyman, a management consulting firm with aviation expertise. He said that the airline business is “hyper-cyclic” –it is the first to drop into negative growth and the last to emerge from it.