TRAVEL NUMBERS TAKING OFF

Ryan Doran | Dec-06-10

 

Holiday travel has suffered in the recent past, but growing individual confidence and a need to conduct business have airfares being bought and roads crowded through December.

 

“There’s a real positive aura in the air,” said Shawn Abaspor, owner of US Limousine Worldwide, US Limousine Bus and Aircraft Charter and Royal Falcon Air Charter in Stamford, a global business suite that has air and ground charter service out of Westchester County Airport and the New York metro area.

 

Abaspor said though the recession is still very much present, the wariness of the last couple of years is being shrugged away and the managers of the Fortune 1000 companies are out traveling and realizing the benefit of doing business face-to-face.

 

“Regardless of collaborative email and teleconferencing, there is nothing to replace that handshake,” said Abaspor. “That’s how you create a business relationship that will last.”

 

Thanksgiving travel up 11 percent

 

Improved economic conditions boosted the Thanksgiving travel by more than 11 percent from the previous year, according to the AAA.

 

The organization projected the number of Americans who traveled for the Thanksgiving holiday to be about 42.2 million travelers taking a trip of at least 50 miles away from home, compared to 37.9 million last year.

 

“While Americans remain cautious with household budgets and discretionary spending amidst high levels of unemployment, many were in a better financial position this Thanksgiving than a year ago,” said Robert Darbelnet, president and CEO of AAA.

 

He said the economic improvement, along with a strong desire to spend time with friends and family after a couple of years of staying home for the holidays, contributed to a significant increase in Thanksgiving travel.

 

According to Darbelnet the increase in Thanksgiving holiday travel signifies an important upturn in travel volume for the holiday after a year of negligible growth in 2009 and two years after a historic 25.2 percent decline in travel in 2008.

 

Trips by automobile remain the dominant mode of transportation for holiday travel with 94 percent of travelers, or 39.7 million people, reaching their destination by driving for Thanksgiving according to AAA. The organization found that leisure air travel is expected to account for 4 percent of overall travel with 1.62 million holiday fliers, an increase of 3.5 percent from last year’s 1.57 million fliers.

 

Norwalk-based travel booking titan Priceline.com’s holiday airfare report found 2010 to be the second most expensive holiday travel year of the past eight. According to Priceline, the national average airfare for Thanksgiving travel was $383; only in 2007 was it higher. The low of the last eight years was 2004, when the average airfare was $313.

 

Working around the holidays

 

The holidays affect corporate travelers, especially those with frequent flier qualification, a bit differently with more focus placed on the days between the holiday days.

 

“Corporate travelers are on the road most of the year,” said Abaspor, “When the holidays come around they tend to want to stay home with their families. Within our business travel niche of the market we see a lot of corporations to be actually more active, except on the days and eves of the holidays. Oct. 1st through Christmas you see a lot of meetings happening and a lot of management moving around.”

 

He said the major yearend holiday employee “thank you” parties are returning after a twoyear hiatus.

 

“We have seen a major growth in the last three months, especially this past October,” said Abaspor. “In 23 years of our business, for on the ground transportation it was the best month ever.”

 

He has seen a 30 percent rise in his business volume over last year.

 

“It is concentrated mostly on corporate functions, events, meetings, expositions and road shows,” said Abaspor.

 

Being diversified in areas and client industries has been important in weathering the storm, he said. “If one sector is weak we can look to others. If the New York metro area has cut down, it doesn’t mean that L.A., Dallas, or D.C. follows the same trend.”

 

Growth expected near 4 percent

 

According to recently released data from the National Business Travel Association’s Business Travel Quarterly Outlook, U.S.-originated business travel spending is expected to grow 3.8 percent this year compared to 2009 despite expectations that economic and business travel growth will slow through the second half of 2010. The organization has forecasted that business travel will continue to advance by 6.7 percent and 6.9 percent for 2011 and 2012, respectively.

 

“Business travel within and from the United States has seen solid recovery after two long years of diminution,” Michael W. McCormick, executive director and chief operating officer of the National Business Travel Association. “However, it is clear that companies are taking their time in shifting from the current cost-containment culture, and recovery will continue to ramp up slowly. We’re looking forward to the end of 2012, when the industry should see a return to peak levels of 2007.”

 

The total number of U.S. business trips saw a sharp decline of 15.6 percent during the recession from 511 million trips in 2007 to 431 million in 2010. The decline was driven in large part by the drop in transient business travel, comprising 60 percent of the total, as a result of tighter travel management, shortening trips, and some use of high-tech teleconferencing. Through 2012, transient travel is expected to advance 31 percent as the economy continues to recover and travel restrictions are lifted.

 

Abaspor said his global business travel is growing very heavily. In regards to specific industry travel he said pharmaceuticals are consistently heavy in volume with information technologies being a close second.

 

Abaspor said his business did not feel the effects of the recession until 2009, when client businesses began to make layoffs. For Abaspor 2009 was a 22 percent drop in business from 2008, making his gain this year of 30 percent most welcome.

 

McCormick said, “As U.S. firms take advantage of healthier demand and supply markets in developing economies and benefit from lower travel expenses in Europe as the dollar grows stronger, the upward momentum in international outbound business travel will continue through at least 2012.”



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