New data from the Global Business Travel Association suggests that business travel finally may be crawling out of a years-long slump, but it warns that a climate of protectionism could stop that streak cold.
Even with complex issues facing the world’s economies at the moment, business travel is taking off, the Global Business Travel Association said this week. Whether it remains airborne depends at least partly on whether Brexit works itself out and whether global trade wars get serious.
GBTA revealed in a new report [registration] that business travel spending reached $1.33 trillion last year, a 5.8 percent increase from the prior year. The association projects a 7.1 increase in spending in 2018.
Much of the growth is being driven by China, by far the world’s largest business travel market, which saw a 9 percent increase between 2016 and 2017. The U.S., the second largest market, saw a more modest 3.1 percent increase.
The accelerating growth comes after years of post-recession slump starting in 2012, a period the association refers to as “The Era of Uncertainty.” GBTA Executive Director and COO Michael W. McCormick, in a news release, said the growth was a good sign but added that “rising protectionism is coming at precisely the wrong time.”
“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,” McCormick said. He noted that there is a correlation between variability in global business travel spending and global trade volumes.
“Intuitively, this makes sense as the movement of goods and services necessitates people, namely business travelers, to support global commerce,” he said.
Another possible hurdle to stronger growth is the potentially messy U.K. exit from the European Union, GBTA noted.
The report comes on the heels of data from a few weeks ago, released by GBTA and Carlson Wagonlit Travel, that suggested that an improved economy could lead to an increase in hotel and ticket prices.