Business travel to the United States has tanked. Fleets and drivers alike are answering the call to economic turmoil and frustration with the lack of response from this administration. Kevin Haggarty is a Canadian business traveler, frequently traveling to the US for trade shows and supplier meetings. His experiences are a window into the growing reluctance among foreign business professionals. In fact, this year, overall US business travel spending has fully recovered to above 2019 levels. Just as political and economic instability have begun to impact the industry, the latest data shows a surprising 9% decline in travel activity.
In addition to his work within the state, Haggarty visits large trade transportation nexus points such as Atlanta, Las Vegas, and Los Angeles on a quarterly basis. He has even canceled trips—worried about leaving the country and reentering across a potentially hostile border. One such trip was to a TAT trade show in Gatlinburg, Tennessee. “Honestly, my nervousness and reluctance to cross into the US stems from that more than any hostility to the American market,” he said. What he’s gone through is unfortunately the trend. It’s no wonder that Canadian travelers are the most pessimistic about the outlook for business travel in 2023.
Declining Travel Trends
Recent data paints a bleak picture for the future of business travel among many groups. Cirium looked at online travel agency booking data, and a clear story emerged. Advance bookings from Europe to 14 US cities during peak summer months fell by 12% compared to last summer. In particular, Western European business travelers were down 17.7%, and Mexican arrivals with business visas suffered an 11.8% drop. The Middle East continued to be the exception, as that region reported a 9.4% increase in visitation to the US.
Brett Sterenson’s business is experiencing a shocking 75% decline from cuts to his funding. He further lamented that US federal government policies are not just killing his business, but the whole industry. “The uncertainty is unnerving for a business travel sector that likes to be safe and likes to be efficient,” said Suzanne Neufang, underscoring concerns shared among many business leaders.
Canadian respondents in the travel sector are especially on edge, with 71% expecting a drop in travel this year. Leslie Andrews, a prominent figure in corporate travel, noted, “What I am hearing is, ‘Things were good in the first quarter,’ but in the second quarter it’s a matter of, ‘Must you take that trip?’” She added that companies are increasingly cautious, stating, “They’re pulling in the reins a bit to make sure only purposeful travel is happening as things grow and evolve.”
Political Climate’s Impact
Just as important as any one factor is the current political climate, which has created a perfect storm against US business travel. As BT4Europe recently highlighted, companies are growing more wary of a US with unpredictable and burdensome entry procedures. This fear is heightened for LGBTQ+ people and those who have expressed political views on social media. This sentiment is echoed by Haggarty, who stated, “I want people to know just how much damage this administration is doing to their relationships globally.”
As firms wrestle with these challenges, the real effects of economic and geopolitical uncertainty are just now starting to be realized. Andrews is expecting to see a continuing drop-off in corporate travel into the US. Businesses have had to take another look at their travel needs with a lot of uncertainty. “Honestly, my nervousness and reluctance to cross into the US stems from that more than any hostility to the American market,” Haggarty noted again, reinforcing the growing apprehension among potential travelers.
The Bigger Picture
Even given these hurdles, there is still some hope for a rebound in the global business travel industry. Now, as the nation bounces back from COVID-19 pandemic, which brought about historic interruptions, total spending is starting to level out. In fact, during the January to March quarter so far this year, more than 1.2 million foreign visitors have come to the US on business-related visas. That represents an extraordinary 7% jump over the previous year.
Experts warn that sustaining this growth requires addressing both policy and perception issues associated with traveling to the US. With many businesses focused on financial prudence and employee safety, it remains to be seen whether these positive trends will continue or falter under ongoing political pressures.
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