A new Grassroots Research survey of corporate travel managers and travel agents showed that US companies plan to increase their travel expenditures this year -- in line with Allianz Global Investors’ outlook for strong US economic growth.
Grassroots® Research recently conducted the latest in a long-running series of surveys with corporate travel managers and other travel experts: 64% plan to spend more on corporate travel in 2018
Not everything is looking up for travel trends: 12% of respondents to our business-travel survey said they will decrease spending in 2018 vs 2017, the second-highest year-over-year reduction since 2012
Our new Grassroots® study confirms a trend we’ve seen taking shape since 2013: convention attendance seems to be flattening out, if not falling slightly overall
In today’s competitive global economy, companies watch their travel budgets closely. When the economy is strong, travel costs frequently go up as well – but the opposite is also true. That makes business travel a bellwether for a region’s economic outlook.
A February 2018 study by Grassroots® Research – Allianz Global Investors’ proprietary in-house research division – showed that overall, US companies expect to spend more on business travel this year compared with last year. This is in line with Allianz Global Investors’ outlook for strong US economic growth.
Higher hotel costs and more-frequent international travel were cited by our survey respondents – a group that included US corporate travel managers and travel agents – as top reasons for increasing their budgets.
The Grassroots® Research team has conducted similar travel surveys over a multi-year period, which allows us to spot other developments:
64 per cent of respondents plan to spend more on corporate travel in 2018; this is consistent with the upward trend seen in previous years
24 per cent of respondents expect their travel expenditures to remain flat in 2018, down from 32 per cent the year before
12 per cent said they will decrease travel spending in 2018 vs 2017, the second-highest year-over-year reduction since 2012
Most Companies Plan to Spend More on Travel This Year
Question: What is the outlook for your 2018 corporate travel spending vs 2017?
Source: Grassroots® Research. Data as at February 2018.
Our new Grassroots® study also confirmed another notable trend: convention attendance seems to be flattening out, if not falling slightly overall.
Fewer respondents plan on sending additional employees to conferences in 2018 (4 per cent); this number has been moving consistently lower since 2015
Conversely, more respondents plan on sending the same number of employees to conferences in 2018 (88 per cent); this is a marked increase over the 24 per cent who gave a similar response in 2015
Every year since 2013, 8 per cent of respondents have told us they plan to cut convention attendance by their employees
Signs of Constrained Attendance at Meetings and Conferences
Question: How does the number of employees expected to attend business meetings & conventions in 2018 compare to the number attending in 2017?
Source: Grassroots® Research. Data as at February 2018.
For the latest 2018 survey, our Grassroots® Research team also examined whether heightened global security concerns are having an effect on corporate travel.
Approximately four-fifths of our respondents told us they have not made any specific policy changes stemming from security concerns
At the same time, around one-fifth of sources said they are examining their “duty of care” programs – which cover their companies’ obligation to take care of travelling employees’ health and safety – or hiring global risk managers and consultants
Senior Consumer Analyst Jon Wolfenbarger said he found this survey helpful in confirming his expectations for improving lodging demand in 2018: “This research suggests that corporate travel budgets could increase by 4 per cent, aided by a stronger global economy and US tax cuts. Employee safety is also another interesting theme, with 20 per cent of corporate travel managers looking closely at duty-of-care programs that help guard employees’ well-being and reduce liability.”
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Innovation Is an Inconsistent Booster of Equity Returns
Today’s high-tech innovations have not only failed to lift official productivity measurements, but they could be less likely to boost overall equity returns than many people think. Our research shows that investors may need to be very selective and active to capitalize on the technology boom.
Even if new high-tech developments eventually boost productivity growth, which remains puzzlingly low, equities in general are not likely to benefit automatically
Our research shows that attractive long-term equity returns have only occasionally coincided with major technological innovations throughout history
High valuations are a key reason why innovation has had a limited market impact in the past: many investors have overpaid for future growth potential, which increased the odds that ensuing returns would be low
Rather than looking for a broad market boost from technological innovation, investors should focus more on “disrupting sectors” – AI-related industries, for example – and on becoming more active as the pace of innovation increases