How Trump’s Tax Bill Impacts Corporate Travel
President Trump’s tax bill was passed in late December 2017, leaving a mixed bag of emotions for Americans nationwide. However, corporate America, especially corporate travel services, is feeling more optimistic about the controversial bill.
Although there is no precise date that President Trump will sign the tax overhaul, it’s hopeful that the changes will decrease the corporate tax rate from 35% to 21%. Here’s what you need to know about its impact on corporate travelers and travel-related organizations.
Increase in Corporate Travel
Because companies’ taxes are decreasing and cash flow is increasing, employees are hopeful they’ll get more travel opportunities. Due to a more recent optimistic business environment, “domestic business travel has already been showing some bounce,” claimed David Huether, SVP of Research at the U.S. Travel Association.
With a little extra capital, the tax reform should encourage businesses to invest time and money back into their core business operations, which should result in more job opportunities. Greely Koch, Executive Director at Association of Corporate Travel Executives, agrees, that “depending on the makeup of these new positions, there is further potential to see an attendant increase in business travel, including travel by those tasked with launching a new facility.”
Major Travel Organizations’ Reactions
Travelers aren’t the only ones hopeful about more opportunity. Travel organizations are optimistic about Trump’s proposed changes, as they believe it “will enable hoteliers to expand their businesses, create more jobs, and help keep our economy strong,” according to Katherine Lugar, President and CEO of the American Hotel & Lodging Association.
Here’s what other travel companies are saying about the overhaul:
- David Kong, President and CEO of Best Western Hotels & Resorts stated:
“We applaud the passage of the tax reform legislation, which is aimed at reenergizing the economy through tax cuts for businesses and individuals. As taxes decrease, small business owners will have more resources to reinvest in their businesses, resulting in a stronger economy overall. With key indicators such as the stock market on the rise, the travel and tourism industry will be one of many sectors to see a direct benefit.”
- Chris Nassetta, Hilton President and CEO, claims that the bill won’t necessarily change the way the company allocates capital. “Tax reform,” he stated, “in reducing our tax rates, is going to drive more free cash flow,” with a majority of it going back to their shareholders. However, the company stated that this tax overhaul is going to be a positive change for its hotel owners and builders. The company is looking forward to providing more opportunities for local employment and potential economic activity.
- Comcast, who owns Universal Parks & Resorts, is giving $1,000 bonuses to 100,000 workers and will invest greater than $50B in infrastructure.
- In a similar fashion, Boeing is going to put $300M toward employee training, workplace upgrades, and charitable giving.
Hopefully, travelers and their accommodating companies will both see a spike in opportunity and income because of Trump’s tax reform.
While this bill is still getting ironed out, planning a corporate trip can feel daunting. That’s why you should rely on a travel management company like Adelman Travel to take care of the details. With customized plans and a total support team, you’ll feel confident on every trip and even better about your travelers’ compliant decisions. We’ve been in the corporate travel space for over thirty years, helping clients of all sizes and budgets. Get in touch today, and call (800) 248-5562 to get started.