A new report shows that for the first time this year, domestic business travel expansion is projected to outpace tourist activity. The U.S. Travel Association’s Travel Trends Index predicts a 2.5 percent increase in overall domestic travel over the next six months, with rooms booked for business meetings outpacing leisure travelers.
“Business travel has been on an upward trajectory in 2018, and this is expected to continue throughout the rest of the year. This is solid evidence that businesses are optimistic in the current economic environment, and are buoyed by the recent tax legislation,” said U.S. Travel Senior Vice President for Research David Huether in a press release. Total travel to and within the United States grew 3.4 percent year-over-year in May.
Bobby Bowers, senior vice president of operations for research company STR, points to the strength of the economy and returning profitability for the uptick in business meetings. Growing demand for meeting space and ballrooms could have financial consequences for event professionals. “If there is an expansion in large conventions, that could cause a price squeeze,” he said. The hospitality sector has not added as much full-service resort inventory over the last five years as it has added select-service properties, with some exceptions in places such as Las Vegas and Nashville, Tennessee.
“When lenders see the opportunity, convention hotels will get built,” Bowers predicted.
Demand from Abroad
The study showed international inbound travel ticked up in May, outpacing the domestic market. Based on continued strength in forward-looking international travel bookings, Huether predicted a healthy summer travel season. Not all was rosy, however. Possible downside risks included moderating global growth and an unwelcoming political climate. He warned that rising trade tensions and higher oil prices may hinder global activity.