Global business travel spend topped $1.2 trillion in 2015, growing 5 percent over 2014, and is projected to reach 1.3 trillion in 2016 according a global economic study released this week by Global Business Travel Association (GBTA) Foundation. The GBTA BTI Outlook – Annual Global Report & Forecast predicts global business travel spend to advance 5.8 percent on average over the next five years, reaching $1.6 trillion in 2020, despite continued global uncertainty.
“Global business travel remains a critical driver of the success of organizations around the globe,” said Michael W. McCormick, GBTA executive director and COO. “Business travel has demonstrated a tremendous resiliency as it continues slow and steady progress even in the face of global uncertainty, a weakened global economy, terrorist attacks, world health issues and other obstacles. Companies across the globe clearly understand the return on investment business travel delivers for their bottom line.”
Total Business Travel Spending: Top 15 Markets (2015)
|Country||Total BTS ($ Billion)||Annual Percentage of Growth|
Growth Across Asia
At $291 billion, China surpassed the United States as the largest business travel market in the world with $291 billion in annual business travel spend last year. China’s economic growth continues to moderate, and GBTA forecasts their business travel market will be the fifth fastest growing major market in the world over the next five years.
Despite declines in growth, China remains the largest single market opportunity for travel suppliers and marketers as their $291 billion market size, coupled with 8.4 percent average growth, will lead to the largest gains in spending of any major market by far. Both India and Indonesia are predicted to average double-digit growth in business travel spending over the next five years.
Aftermath of Brexit
The annual report was compiled before the U.K. voted for Brexit on June 23, but the added uncertainty the vote brings will likely be felt on business travel. The financial upheaval and pending changes to trade and immigration rules are expected to raise concerns among business management, causing some postponement and outright cancellation of trips. If the U.K. does enter a mild recession, domestic and outbound business travel is also expected to suffer. On the other hand, a weaker pound will make leisure and business travel to the U.K. more affordable.
Expectations are slightly downgraded for the United States. The report projects only 0.9 percent growth in U.S. business travel this year to $292.5 billion. In 2017, spending is estimated to increase by 4.2 percent to $304.9 billion. Increasing variables in domestic and global economies; uncertainty leading up to the U.S. presidential election; the surprising vote from the U.K. to leave the EU; and continued signs of a weakening global economy have combined to influence a more pessimistic outlook for U.S. business travel over the next six months.
“The slow growth environment of the U.S. and global economies has taken a toll on many fronts leading to this ‘new normal’ of slow, but steady one to two percent progress,” said McCormick. “When growth does re-accelerate, companies must be ready with the newest technologies, the most productive workforce and the critical customer relationships necessary to take full advantage.”