going to decelerate, so in real terms, you’re probably looking at growth close to what it was this year, which is probably a little under 2 percent or so. That’s actually not too bad. The other thing to keep in mind is that growth in domestic
travel—emanating from the United States—is expected to slow, but travel fromabroad to the United States is going to grow by close to 9 percent next year. In fact, spending by for- eigners in the United States is going to account for about 30 percent of the growth in travel expenditures. Breaking down business travel vs.
leisure travel, next year we’re going to see continued growth but decelerations in both. Rightnow, our forecast is that after growing by about 8.6 percent this year, leisure travel is going to slow to around 4.6-percent growth next year. Business travel is going to slow also; after growing 5.5 percent this year, we’re expecting to see growth in the 3.3-percent range next year. There’s a lot of anxiety right now in the business sector overall, and heading into the election cycle, there’s a likelihood of some increase in uncertainty, which is probably going to engender a little slower growth overall. Right now the expectation is that the economy next year is
Some of the
activity. If we fell into a double-dip recession, that of course would constrain business spending and travel significantly, as it did during the last recession. The fact that we’re going to see business travel growing around the 3-percent range is proba- bly a good outlook. I don’t think it would be realistic to expect too much faster growth than that. But once the expansion starts gaining some traction, maybe toward the end of next year, into 2013, the likelihood of travel is going to pick up, because you’re going to see an increase in profits, an increase in confidence. Businessmeetings in general are going
indicators are start-
ing to signal that we’re probably not headed for a double-dip recession. Business demand is likely to pick up.
going to continue to grow. And I think it’s going to grow faster than this year, in the sense that in the first half of this year, we saw anemic growth. So even if we expect to see a pickup in growth in the second half of the year, you’re still looking at the economy growing by 1.6 percent. Next year, we’re expecting overall GDP to grow by about 2.2 percent, which, while bet- ter than this year, is still fairly lackluster. Probably the good news is that either in the second half of this year or the first half of next year, the economy will get back to the level of activity at the previous peak, which was the fourth quarter 2007. On the business side, a lot of travel is going to be driven by profits, by business confidence, and by general economic
56 pcmaconvene November 2011
to be driven by the growth in non-for- eign business output. If you’d asked what the likelihood of growth in that sector would be two months ago, or amonth-and-a-half ago, Iwould have said that next year would have been fairly sluggish. But I’mstarting to turn
a little more optimistic now, because some of the indicators are starting to signal that we’re probably not headed for a double-dip recession. Business demand is likely to pick up. Profits have been grow- ing very strong. In addition to that, corporations
have a lot of cash on hand. As we get closer to the election cycle, the probability
of any major change in legislation—like changes to the health- care laws, or increasing regulations — is going to diminish, which would mean that business confidence will start to pick up, because there’s going to be more certainty. If there are not going to be improvements to the tax code or improvements to the regulatory environment, at least there aren’t going to be changes for the worse.Which I think will start to embolden com- panies to start to invest, to expand operations, which is then going to mean more meetings. So next year should be a little brighter than this year.
David Huether is senior vice president for research at the U.S. Travel Asso- ciation (www.ustravel.org).