Project-based business travel spending reached $45.4 billion in 2017, making up 15 percent of all U.S. business travel spending, according to a study from the Global Business Travel Association in partnership with InterContinental Hotels Group.
Travelers took a total of 66 million trips last year for project-based purposes, representing 12 percent of all U.S. business trips and 19 percent of all U.S. business trips taken for transient purposes. “Demand for project-based business travel will continue to rise with top project-intense sectors forecasted to grow faster than the broader economy in the coming years,” Michael W. McCormick, GBTA executive director and COO, said in a statement. “While project-based business travel is extremely diverse, there are key underlying trends revealed in this study that marketers, suppliers and travel buyers can use to increase revenue, cut costs and improve traveler satisfaction.”
“Based upon the learnings from this study, the industry has an opportunity to develop more effective strategies to engage this segment of travelers to best serve their unique needs moving forward,” Derek DeCross, SVP of global sales at IHG, said in a statement.
The average spend per business trip was significantly higher for trips taken for project-based purposes at $679 than for other business trips, which totaled $533, taken over the same period. Longer average stays along with higher trip budgets drove the uptick in spending. Project-based business travelers spent $15.9 billion on lodging, $14.6 billion on air transportation, $7.0 billion on food & beverage, $1.8 billion on entertainment, $4.2 billion on ground transportation and $1.9 billion on retail.
Project-based business travel spans the U.S.
The top project-based business travel markets in the U.S. are Los Angeles with seven percent of all trips and New York with five percent of trips. Meanwhile, project-based business travel in Las Vegas, Chicago and San Francisco accounts for four percent of each market. A handful of states have a higher proportion of project-based business travel relative to all business travel activity.
Breaking down project-based business travel
The rate at which firms invest in project-based business travel differs significantly across industries. However, the top three industries are manufacturing, real estate and professional services. A total of $10 billion has been spent on the manufacturing project-based market. The construction industry is the most project-travel-intense sector by a wide margin. Project travel in this industry accounts for 20 percent of total business travel spending.
Business travelers allocated a significantly higher portion of project-based trip budgets towards accommodations. The average spent per trip on lodging grew 142 percent higher for project-based trips than non-project based trips. Location outweighs all other attributes when it comes to choosing a hotel property. Project-based business travelers are also less likely to book accommodations on their own directly through a hotel. Project travelers’ top three amenities during their stays are WiFi access, breakfast included in the rate and gaining additional loyalty points.