Forecast: Business travel to remain anemic

• Spending on business trips should pick up next year, though it will be driven by higher travel costs
• Economic and political uncertainties here are partly behind the slowdown, forecasters say

Corporations won't be sending their employees out on the road in droves through the end of the year as they wait for the U.S. and European economies to improve, a new study out Tuesday projects.

The growth in spending on business travel in the U.S. is expected to remain anemic the rest of the year, with rising costs accounting for most of it, the Global Business Travel Association says in a quarterly assessment.

The trade group for business travel managers says economic and political uncertainty in the U.S., combined with turmoil in Europe and slower economic growth in China, will curb growth.

The group predicts that travel will pick up once the U.S. presidential election is decided and corporations get a chance to assess their financial performance for the year.

Michael McCormick, executive director and chief operating officer of the trade group, says that for now corporations are in a "wait-and-see mode."

"We're at an interesting point ... right now, where it's pre-election, there continues to be a somber mood in the economy in Europe," he says. "All those things are having an impact on business here."

Total U.S. business travel spending is expected to grow 2.6% for 2012, reaching $257 billion by the end of the year, the group says. That's an improvement from the 2.2% increase for the year the group had predicted at the end of the second quarter, which ended in June.

But the higher cost of traveling is what's driving that growth.

The number of trips taken is expected to fall to 438.1 million this year – a 1.6% reduction from 2011.

The group forecasts that next year, business travel spending will grow 4.9% to $270 billion. But the number of trips will likely fall 1.1%.

International travel, which took off after 2009 as companies tried to score more clients overseas, will be tepid as Europe continues to recover and growth in the developing world slows, the group projects.

Spending on international trips will grow 2.5% in 2012, then 7.7% in 2013. That's a more conservative prediction than the group had made less than a year ago.

Group travel spending is also expected to have modest growth after bouncing back from its bottom in 2009. Group travel last year rose 7.2%. It will likely increase by 2.3% this year and 5.5% next year.

Martin Lagler, head of accounting and travel at information technology company T-Systems, says his company is scrutinizing all trips. If they don't have the potential of bringing in a new client, they don't get approval. And starting this year, approval for international travel has to come from the CEO.

"In the past we said, 'Yeah, go ahead and make your own decisions,'" he says. "Now it's, 'Is it really necessary?'"