Study: After Shaky 2012, Business Travel Spending on the Rise Globally
Economic shifts and opportunities in emerging markets will result in increased global business travel spending over the next several years, according to an association in the industry.
Global business travel spending is expected to reach $1.2 trillion in 2013, a 5.4 percent increase from 2012, according to the Global Business Travel Association’s “Business Travel Index (BTI) Outlook—Annual Report and Forecast.” GBTA projects that the trend will continue into the next several years, with travel increasing 8.2 percent in 2014, 7.6 percent in 2015, 7.2 percent in 2016, and 7.1 percent in 2017.
This is welcome news in an industry that experienced a tumultuous 2012 due to economic and political uncertainty throughout the world.
The report, sponsored by Visa, Inc., detailed travel spending in 75 countries, as well as the top industries, economic factors, and characteristics that influence business travel. It found that developing markets around the world will play a role in reshaping the business travel landscape—especially those in the Asia Pacific region and Latin America.
“Travel is indispensable to trade, commerce, and business expansion in a global economy,” Michael W. McCormick, GBTA executive director and COO, said in a statement. “This report shows that new opportunities are opening up in markets around the world for companies willing to invest in business travel to drive growth. It also serves as yet another wake-up call for the U.S. and Europe to improve aging infrastructure, establish fiscal order, and stay competitive, because emerging economies are increasingly focused on meeting their own fast-growing business travel needs.”
Business travel spending in the Asia Pacific region has grown by 8 percent annually since 2000—more than doubling to $393 billion in 2012—fueled by China’s emergence as one of the top business travel markets.
“This year’s global BTI shows the importance that emerging markets like China, Brazil, and India play in the global business travel marketplace,” Tad Fordyce, head of global commercial solutions at Visa, Inc., said in the statement. “With global business travel expected to experience continued growth in the next few years, China is projected to overcome the U.S. as the top business travel market in the world by 2016.”
Other key findings from the report:
- Inroads in India. In 2012, India surpassed Canada to become the 10th largest business travel market in the world, spending a total of $22.1 billion on business travel. Over the next five years, GBTA expects India’s business travel spend will grow at a compound rate of 13.5 percent, making it one of the world’s fastest growing markets.
- Growth in Mexico. GBTA expects Mexico to experience the highest growth in business travel spending in North America over the next five years as economic reforms are put into place that should grow its economy faster than those of its neighbors to the north.
- The BRIC nations. While business travel spending is expected to increase globally, growth in the BRIC nations (Brazil, Russia, India, and China) will far outpace the rest of the world, GBTA said. The only exception is Brazil, where growth is expected to slow after 2014.
The U.S. topped the list of business travel markets with $262 billion in total spending in 2012, followed by China ($196 billion), Japan ($65.2 billion), and Germany ($50.5 billion).