NBTA Financial Forum Attendees Gain Economic Insights

Participants Get First Glimpse of Major Business Travel Research Project

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. March 31, 2009

NEW YORK, NY, MARCH 31, 2009 - More than 150 corporate travel professionals gathered yesterday at the third annual National Business Travel Association (NBTA) Business Travel Financial Forum in New York. Speakers included leading economists, airline and hotel industry analysts, and executives at airlines, hotels, and distribution companies, who examined the current state of the economy and their outlook for the future.

NBTA President & CEO, Kevin Maguire, CCTE, GLP, said, "In the current economic downturn, NBTA is pleased to be able to offer a program that gives our attendees insight into the current state of play and what to expect in the coming years. As a travel buyer, I leave the Financial Forum with take-homes that will help me drive value for my company."

While speakers offered varying perspectives on the economic outlook, the consensus was that recovery will begin in 2010. The most bullish outlook came from Ken McGill, EVP & Executive Managing Director of Global Insights, who projected the first positive growth for U.S. GDP would come in the first quarter of 2010. In the meantime, McGill said, "We have to batten down the hatches and live through 2009. It is going to be a tough, tough year."

Frederic Mishkin, a former Governor of the Board of Governors of the Federal Reserve System and regular guest host on CNBC's Squawk Box, laid out four possible scenarios for how the economic crisis will play out. Mishkin's worst-case scenario would include another crisis in the financial system - such as bank failures in Eastern Europe - that would lead to a worldwide depression. His best-case scenario envisions the Obama Administration taking a new approach to the crisis that would go well beyond the types of stimulus efforts that the U.S. government has made to date. He said one major package of government intervention in the trillions of dollars would be the only mechanism that would enable us to avoid a long-term recession or even depression.

Michael Boyd, Founder of The Boyd Group, was among the speakers who spoke about the micro level about the travel industry. Boyd projected that the number of enplanements will continue to decline through 2010. Even as enplanements begin to rise, capacity growth will lag behind, not rising until 2011. Michael Linenberg, Managing Director, Equity Research Group, Merrill Lynch, said the current decline in U.S. airline capacity is the largest reduction since 1950. The airlines, he said, are displaying an unprecedented level of discipline in managing the current reduction in air travel demand.

McGill also gave attendees the first preview of research currently being conducted by NBTA, the NBTA Foundation, and Global Insight. Several research projects to be conducted over the coming months promise to provide the most robust view ever available into the size and scope of the U.S. business travel industry, the economic impact of the industry, the contribution of business travel to corporate goals and profitability, and the contribution of travel management to a company's effectiveness over time. The research will be published in multiple reports during the second and third quarters of 2009.

McGill shared some of the initial baseline data on the economic contribution of business travel. In 2007, he said, U.S. business travel had a positive GDP impact of $208 billion, created 3.3 million U.S. jobs, generated $82 billion in tax revenue for state, local, and federal governments, supported 1 in 42 U.S. jobs, and represented 2,4 percent of the U.S. economy.