Reducing Business Travel Will Bring Short-Term Savings but Long-Term Negative Impacts, Says Survey
Research from USTA and partners sees less spending in next six months compared with 2019 >>
by: Harvey Chipkin
A new survey reveals that over half of large-company executives agree that reducing business travel may represent short-term savings but will bring long-term negative impacts on revenue. The survey is part of the Quarterly Business Travel Tracker, launched in April in a collaboration between U.S. Travel Association, J.D. Power and Tourism Economics. Despite agreement that reducing business travel will be harmful to long-term sales, more than two-thirds of executives expect their company will spend less on business travel over the next six months compared with the same period in 2019. Further, half of companies still have policies in place restricting business travel. U.S. Travel is encouraging these companies to prioritize a return to normal business travel operations. Companies that restrict or reduce business travel risk negative impacts to their bottom lines and losing a competitive advantage in the coming months, as the Quarterly Business Travel Index (BTI) projects that business travel activity will accelerate in the near term.
This near-term positive outlook also aligns with U.S. Travel’s latest forecast, which shows that domestic business travel will experience strong growth in 2022 before tapering off in following years. However, there are headwinds on the horizon that threaten growth. In the coming quarters, companies will make travel decisions in a business environment that is adjusting to increased interest rates and high inflation, as well as labor shortages and supply chain challenges. Elevated risks of recession are anticipated to result in some caution among corporate decision-makers, which would stifle business travel spending by some companies. Additionally, with more businesses setting aggressive goals to reduce their carbon footprint, companies may choose to reduce business travel to achieve net zero emissions.
U.S. Travel is advocating for federal policies to offset these threats and help accelerate the business travel sector’s recovery. In a recent letter to U.S. Treasury Secretary Janet Yellen, U.S. Travel called for the agency’s support on a tax extenders package that includes a temporary restoration of the entertainment business expense deduction and an extension of full expensing for business meals. The federal government should also call workers back to the office and encourage these workers to return to the road for business travel. Further, U.S. Travel is advocating for the federal government to play an active role in drawing large, international meetings and events to the US to spur business travel and increase global competitiveness.