We have discussed the decline in business travel several times here. According to the IHS Global Insight report, the sector is projected to decline by about 15% this year. But the full version of the same report also mentions that 2010 will see a slow and modest recovery in business travel – to the tune of 1.1 percent CAGR.
Focusing on the US portion of the report, business travel represented 2.3% of total materials and service costs across all U.S. industries (including government) in 2008. That’s down from 3.18% a decade ago. Business travel as a share of profits was 5.18 percent last year, down from 7.14 percent 10 years earlier.
Beyond the economic considerations of the current recession, the decline comes from better efficiency in travel and better choices for the business traveler. The report concludes that business travel will look for more and more innovative solutions to make travel even more efficient, so our assumption is that whatever growth will be, it will be mostly focused on new travel alternatives that cater best to the needs of the business traveler.
Gad Barnea – CEO – FlyMiwok, Inc.
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