... spikes in oil prices should not derail growth in business travel in 2011. GBTA’s Foundation conducted the study, looking at three scenarios in which oil prices remain above $125, $150, and $200 per barrel through 2011, with prices returning to a baseline level by 2013. GBTA says that while growth in business travel spending and the number of trips taken would be impacted, short-term price spikes would not force an overall market decline.
GBTA considered three price scenarios looking at short-term price spikes through the rest of this year:
Oil priced at $125 bbl would result in a reduction of nearly $5.8 billion or 1.5 percent in total U.S. business travel spending and roughly 700,000 trips forecast between 2011 and 2013.
Oil priced at $150 bbl would result in a reduction of nearly $6.9 billion or 1.8 percent in total U.S. business travel spending and roughly 1.8 million trips forecast between 2011 and 2013.
Oil priced at $200 bbl, the extreme shock scenario, would result in a reduction of almost $9 billion or about 2.5 percent in total U.S. business travel spending and roughly 2.7 million trips forecast between 2011 and 2013.
Comments GBTA executive director/COO Michael W. McCormick, “In light of current developments in the Middle East and the highs we’re now seeing in oil prices, this research shows business travel is more resilient than the conventional thinking might suggest. It underscores the point that business travel is, very simply, central to economically productive activity overall. So, although an oil price spike would be very painful for the travel industry, essential travel would clearly go on and in fact the number of trips taken would continue to increase.”
For more information, visit www.gbta.org or www.gbtafoundation.org.
Thanks for reading. jfi