Overseas Business Travel Seen Taking Off on Europe Bounce

Business executives are forecast to increase transatlantic travel this year as economic growth recovers in Europe, the U.S.'s biggest trading partner, spurring trips for meetings and events.

Spending on international business travel should jump 13 percent this year to $36.7 billion in 2014, after rising only 1.8 percent last year and 0.8 percent in 2012, according to a Visa Inc.-sponsored study by the Global Business Travel Association.

"There are no boundaries now to where you go to find growth and find business," said Michael McCormick, executive director and chief operating officer of the GBTA.

The euro-zone economy is predicted to grow 1 percent this year after contracting 0.4 percent in 2013, and the U.S. government has resolved, at least for now, its budget bill. The U.S. economy is predicted to expand 2.6 percent this year, after 1.7 percent in 2013.

The outlook marks a turnaround from the previous two years, when corporate travelers curtailed trips amid a financial crisis in Europe and U.S. budget squabbles that culminated in a government shutdown last year. Federal spending cuts, known as sequestration, earlier in 2013 led to the layoff of air traffic controllers that negatively affected the travel industry, McCormick said.

"Those are canceled trips that don't get rescheduled," he said in a phone interview, "and it's a disruption for business and business travelers, which is the last thing we need to do in terms of our economy."

U.S. business travel spending is seen advancing 6.6 percent to $289.8 billion in 2014, according to GBTA. That corresponds to 461 million trips for the year, an increase of 1.7 percent.

Competition for business travelers is particularly intense because they tend to purchase tickets close to their travel date and, as a result, pay higher fares.

"Unlike the leisure market, where it's more price-driven and more circumstance-driven, the business travelers, when they're served, are loyal," McCormick said.

To contact the reporter on this story: J. Kyle O'Donnell in New York at jodonnell49@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net