In 2017, project-based business travel spending reached $45.4 billion, comprising 15 percent of all U.S. business travel spending, according to a new study from the Global Business Travel Association (GBTA), in partnership with InterContinental Hotels Group, that the GBTA says is the first of its kind. In total, 66 million trips were taken 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.
To be considered project-based travel, the travel must revolve around a project, have both a start and end date, and have a duration of at least four nights or have some recurring component. It does not include group travel, relocation or travel for training.
“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,” said Michael W. McCormick, GBTA executive director and COO, in a written 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.”
The average spend per business trip was significantly higher for trips taken for project-based purposes ($679) than for other business trips ($533) taken over the same period. The higher spending is driven by longer average stays and higher trip budgets. Project-based business travelers spent a total of $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 Widely Distributed Across United States
Project-based business travel mainly reflects the distribution of broader-based business travel activity with Los Angeles (7 percent of all project trips), New York (5 percent), Las Vegas (4 percent), Chicago (4 percent) and San Francisco (4 percent) coming in as the top project-based markets. There are also a handful of states noted in the graphic below that have a higher proportion of project-based business travel relative to all business travel activity.
Breaking Down Project-Based Business Travel
While the rate at which firms invest in project-based business travel differs significantly across industries, the top three industries include manufacturing, real estate and professional services – with $10 billion alone spent on the manufacturing project-based market. The most project-travel-intense sector by a wide margin is the construction industry, with project travel comprising 20 percent of total business travel spending.
A significantly higher proportion of project-based trip budgets get allocated towards accommodations, with the average amount spent per trip on lodging coming in 142 percent higher for project-based trips than non-project based trips. When it comes to choosing a hotel property, location by far trumps all other attributes driving the lodging choice. Project-based business travelers are also significantly less likely to book lodging on their own directly through a hotel. Project travelers’ top three amenities when choosing lodging include WiFi access, having breakfast included in the rate and being able to secure additional loyalty points.
The study also delves further into the profile and trip behavior of project-based business travelers.