Market Overview

GBTA Forecasts Seven Percent Growth in Global Business Travel Spend, Potentially Signifying End to Era of Uncertainty

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Rising Protectionism Threatens to Derail Business Travel Spending
Breakout

Global business travel spending reached $1.33 trillion in 2017,
advancing 5.8 percent over 2016 levels, according to the GBTA BTI™
Outlook – Annual Global Report & Forecast
, a new report released
today at GBTA
Convention 2018
by the Global Business Travel Association. Spending
is forecast to advance another 7.1 percent in 2018 and will expand to
$1.7 trillion by 2022.

This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180814005663/en/

2018 GBTA BTI™ Outlook – Annual Global Report & Forecast (Graphic: Business Wire)

2018 GBTA BTI™ Outlook – Annual Global Report & Forecast (Graphic: Business Wire)

"This pick-up in growth could signify an end to the ‘Era of Uncertainty'
in global business travel, but rising protectionism is coming at
precisely the wrong time," said Michael W. McCormick, GBTA executive
director and COO. "The direction of trade policy is far and away the
biggest wild card that could impact our forecast for global business
creating uncertainty that could derail the recovery."

The "Era of Uncertainty" has been punctuated by moderate growth in
business travel spending, which has been trapped in roughly the 3-5
percent range annually since 2012. The two-year period spanning
2017-2018 is projected to be the strongest two-year period for business
travel since the initial recovery from the Great Recession in 2010 and
2011. In 2018, GBTA expects 18 out of the top 20 business travel markets
to outpace their growth average over the last five years. On average,
GBTA projects global business travel to expand by 5.2 percent over the
forecast horizon.

The current high-growth business travel era has been fueled by improving
economies around the globe. Many of the improvements, however, have been
ignited by both monetary and fiscal stimulus, which is likely to lead to
policy challenges and slower economic growth down the road. GBTA
anticipates the emergence of more downside risks as we move into 2019
including:

  • rising interest rates in the United States causing increased debt
    payments for global borrowers
  • maturing business cycles in developed markets likely leading to
    slowing growth
  • rising budget deficits in both developed and emerging markets
    challenging many major global economies
  • rising protectionism sparking potential trade wars

The Importance of Free Trade to Global Business Travel

The potential for trade wars is the biggest global risk that GBTA is
watching. Drastic increases in tariffs and associated retaliatory
measures could have detrimental impacts on the global economy and the
global business travel market. An analysis of the mathematical
correlation between the two shows nearly 60 percent of the variability
in global business travel spend can be explained by global trade volumes.

"Intuitively, this makes sense as the movement of goods and services
necessitates people, namely business travelers, to support global
commerce," added McCormick.

Brexit Fallout

Business travelers in Western Europe generated $310 billion in total
business travel spending in 2017. The region saw 4 percent growth over
2016 levels including 5.6 percent growth in Germany, 3.9 percent in
France and 6.3 percent in Spain. The only major drag on the Western
European business travel market has been the UK, which declined -0.7%
last year. The decline in Britain has been driven by the fallout from
the Brexit vote – a weakening pound, increased inflation and the
associated pressure on consumer spending.

GBTA projects moderate to strong growth over the forecast horizon in
Western Europe with Germany, France and Spain all growing their business
travel markets in the 4-6 percent range. The biggest downside risk for
the region, however, comes from the British business travel market, as
the health of the market will hinge on the final terms of Brexit
negotiations.

The World's Top Business Travel Markets

GBTA projects India and Indonesia to be the fastest growing markets over
the next five years, picking up 11.3 percent and 8.7 percent,
respectively. These two markets continue to show enormous growth
potential. The next fastest-growing major business travel markets will
come from Scandinavia as both Sweden and Norway are projected to grow
significantly faster than average – 6.8 percent and 6.6 percent,
respectively.

Despite the slowdown in China's economy, the Chinese business travel
market is poised to be the 5th fastest-growing market in the
world over the next five years, picking up an additional $129 billion in
annual business travel spend by 2022. China remains the world's largest
business travel market and will continue to distance itself from the
rest of the world. Formerly the world's largest market, the U.S.
business travel market is projected to grow slightly below the global
average over the next five years at 3.9 percent.

The top 15 business travel markets remained largely unchanged from last
year, except for India surpassing South Korea for seventh on the list.
India is projected to crack the top 5 by 2022.

Shifting Market Share

The regional share of global business travel shifted only slightly since
last year's outlook, with Asia Pacific picking up 1 percent of market
share and North America losing 1 percent, while shares in Europe, Latin
America, the Middle East and Africa remained largely unchanged. GBTA
expects the Asia Pacific region to gain another 2 percent of market
share by 2022, while North America is expected to lose an additional 1
percent.

When breaking the world's major business travel markets into segments,
we see another impending shift coming. The Stalwarts make up roughly
half of the global business travel spending market today and are
comprised of many of the world's major economies. India, China and
Indonesia, once considered emerging markets, now form their own segment
and continue to grow at an extremely rapid pace. This segment will pick
up ground on the Stalwarts over the next five years, gaining $164
billion in annual spend by 2022. GBTA projects this segment to be the
largest in the world by 2035.

More Information:

The report, GBTA BTI™ Outlook – Annual Global Report & Forecast, is
available exclusively to GBTA members by clicking
here
 and non-members may purchase the report through GBTA by
emailing Paul Yachnes. Click
here
to view a free preview of the research.

About the Global Business Travel Association

The Global Business Travel Association (GBTA) is the world's premier
business travel and meetings trade organization headquartered in the
Washington, D.C. area with operations on six continents. GBTA's
9,000-plus members manage more than $345 billion of global business
travel and meetings expenditures annually. GBTA delivers world-class
education, events, research, advocacy and media to a growing global
network of more than 28,000 travel professionals and 125,000 active
contacts. To learn how business travel drives lasting business growth,
visit www.gbta.org.

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