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Business travel expected to rise 5%, sellers market taking over


Some 63% of corporate travel managers surveyed by the National Business Travel Association expect business travel to continue to improve over the next 12 months, despite predictions of a weakening US economy. The organisation found that increasing outbound international travel and higher costs were driving higher travel budgets. Indeed, travel companies, including airlines, are wielding more power making corporate discounts harder to come by.

NBTA, in its 2010 Industry Pulse: Business Travel Buyers’ Sentiment penned by the NBTA Foundation, stated the average corporate travel budget was up 5.5% in 2010 compared with a year ago and expect it to expand an additional 4.45% in 2011 to USD98 million. The foundation surveyed 170 North American corporate travel buyers in September finding that more travellers (38%) are taking more trips (51%) this year. However, higher rates and fares (67%) and an increase in airline fees (64%) are the most often cited contributors to increased spending. With the exception of domestic car rentals, travel buyers expect domestic prices to rise between 3% and 4.5% in 2011.

“Business travel is coming back; there is no doubt about it,” said NBTA President and CEO Craig Banikowski. “Given the difficulties the industry faced during this last recession, corporate travel buyers welcome the improved conditions, and companies are already getting their teams back on the road to help build business. Of course, with economic recovery comes higher costs and budget challenges, and to prepare accordingly, travel managers must have a comprehensive overview of what’s to come.”


2009 USD

Estimated 2010 Change

Projected 2011 Change


Domestic Airfare





International Coach Airfare





International Business Class Airfare





Domestic Hotels





International Hotels





Domestic Car Rentals





The international share of US business travel spend in 2009 was 28% and buyers expect this share to continue to increase. Outbound international spend per company is estimated to increase by 13% in 2010 to $28.2 million. Travel buyers expect their international business travel spend to further increase by 11.4% to $31.42 million in 2011.

“As the economy continues to improve and both domestic and international costs rise, we will see airlines and hotels wield more negotiation power,” said Banikowski. “Many travel buyers are already experiencing more strict market thresholds and expect this to result in smaller corporate discounts going forward. Now is the time for buyers to work closely with suppliers to strike a fair balance in services, while also keeping in mind that the ‘buyers market’ we’ve been able to take advantage of over the past few years may slowly be turning around. To face these challenges going forward, travel managers should consider tightening policies, implement strategic meetings management programmes, and continue to monitor volume and market share thresholds to ensure proper leverage in negotiations.”

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