Business travelers are voicing their demands, and why should the airlines and hotels care? Well, this group of travelers is going back on the road, buoyed by all that corporate cash. According to travel industry research firm PhoCusWright, the U.S. travel agency/travel management company sector is set to surge 15 percent by the end of the year, compared to only 8 percent growth for the leisure/unmanaged business travel market. The business traveler is largely responsible for this rate of growth.
While the U.S. travel market as a whole is recovering, it’s the corporate travel folks who are leading the charge. “Corporate travel’s wild ride over the past two years has caused an unusual shift in trend, with online channels growing more slowly than the total U.S. travel market for the first time,” says Douglas Quinby, PhoCusWright senior director, research. The phenomenon reflects the peculiar dynamics of this recession, but the reversal will be short lived. “In 2011, the long-term arc of continued shift from offline to online channels will resume,” Quinby adds.
So, what can the travel business expect in 2011 and beyond? Take a look below to see four signs that the travel market is on the mend.
1. A big swing: in 2009, the U.S. travel market fell 15 percent, due largely to the effects of the financial crisis in 2008 and subsequent global recession. No business wants to spend money in those conditions. The economy may still be unpleasant, but companies are starting to put their capital to work again, and that includes investing in business travel to generate some revenue.
2. Half of the loss regained: the projected 2010 business travel market recovery means that half the spending lost from 2008 to 2009 is coming back. PhoCusWright forecasts a total U.S. travel market size of above $255 billion.
3. Growth trajectory: this year’s 10 percent overall growth rate isn’t going to get us back to 2006 levels this year, but the next two years will be positive. PhoCusWright says to look for record levels in 2012.
4. Online future: that sounds a bit obvious, right? Well, the numbers tell the whole story. Online travel agencies will beat the record levels they hit in 2008. The online leisure and unmanaged business travel sector fell only 5 percent last year, thanks to bargain-hunting. This year, the sector will remain stagnant, according to PhoCusWright, at 38 percent of the total U.S. travel market – I suspect this is because the small decline in 2009 sets a higher bar for recovery in 2010.
[photo by laverrue via Flickr]