GBTA Foundation Research Finds a Moderate Euro Debt Crisis Would Hamper Growth While a More Extreme Scenario Would Lead to Retraction
Alexandria, VA (February 15, 2012) – If the European debt crisis grows significantly worse it would wreak havoc on U.S. business travel, according to new research from the Global Business Travel Association Foundation (GBTA). According to a new report, U.S. Business Travel Outlook: European Debt Crisis Scenario, a severe crisis could result in a 9% decline in trips and 16% drop in spending – nearly $88 billion.
Given the critical role of business travel in facilitating economic growth, the current slow U.S. recovery could be severely hampered if the European debt crisis is not resolved. International outbound travel, which has played an outsized part in the revival of business travel since the recession, would be crushed by further deterioration in the Eurozone.
European Debt Crisis: From the Current Situation to the Potentially Severe
The research identified three different scenarios for the European Debt Crisis:
- Baseline/Current Scenario: A mini recession in Europe, which is already expected, would be short lived and would result in continued growth in U.S. business travel spending at $263.5 and $277.3 billion in 2012 and 2013 respectively. The number of trips taken is also projected to grow slightly at 443.1 and 443.6 million trips in 2012 and 2013 in the baseline situation.
- Moderate Scenario: A prolonged recession in Europe would result in business travel growth flattening with a reduction in spend of almost $40 billion (-7%) and roughly 42 million trips (-5%) forecast between 2012 and 2013.
- Severe/Extreme Scenario: Widespread debt and banking failures across the Eurozone and possible dissolution of the European Union would push spending back to levels not seen since the Great Recession with a reduction of spend of nearly $88 billion (-16%) and trip volume by over 76 million trips (-9%) forecast between 2012 and 2013.
“This data serves as a wakeup call to the entire industry as we watch European policy makers work to contain the debt crisis. While these problems are happening abroad, they most certainly can have an effect at home,” said Michael W. McCormick, executive director and COO, GBTA. “We’ve seen a resurgence in business travel investment, meaning slow but strong economic recovery for the U.S. However, in a severe situation where the Eurozone may even break apart, business travel would drop dramatically, severely impeding economic growth overall.”
The research was conducted through an analysis and econometric model used in GBTA’s Business Travel Quarterly Outlook reports which was altered or “shocked” to assume conditions of a worsening European debt crisis. Both the report U.S. Business Travel Outlook: European Debt Crisis Scenario and The Business Travel Quarterly Outlook – United States is free of charge to all GBTA Members (http://www.gbta.org/foundation/resourcelibrary). Non-members may purchase the reports through the GBTA Foundation at email@example.com. Members of the media seeking report details should contact GBTA Communications at firstname.lastname@example.org.
CONTACT: Meghan Henning, +703-236-1133, email@example.com
Jamie Colunga, +212-446-1877, firstname.lastname@example.org
About the GBTA Foundation
The GBTA Foundation is the education and
research foundation of the Global Business Travel
Association (GBTA), the world’s premier business
travel and meetings trade organization headquartered
in the Washington, D.C. area with operations on six
continents. Collectively, GBTA’s 7,000-plus members
manage more than $345 billion of global business
travel and meetings expenditures annually. GBTA
provides its growing network of more than 28,000
travel professionals and 125,000 active contacts
with world-class education, events, research,
advocacy and media. The Foundation was established
in 1997 to support GBTA’s members and the industry
as a whole. As the leading education and research
foundation in the business travel industry, the GBTA
Foundation seeks to fund initiatives to advance the
business travel profession. The GBTA Foundation is a
501(c)(3) nonprofit organization. For more