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SOURCE Global Business Travel Association
GBTA Foundation Report Forecasts Global Business Travel Spending to Hit Record High of Nearly $1.2 Trillion in 2014
Led by Sustained Growth in China, Global Business Travel Spending Expected to Rise Nearly 7%
WASHINGTON, July 28, 2014 /PRNewswire-USNewswire/ -- Business travel in Asia Pacific, led by a dominant China, outpaces the rest of the world, according to a newly released travel forecast by the GBTA Foundation – the education and research arm of the Global Business Travel Association. Overall, the GBTA BTI™ Outlook – Annual Global Report & Forecast, sponsored by Visa, Inc. expects global business travel spending to hit a record $1.18 trillion USD in 2014, a 6.9 percent growth over the previous year.
Driven by infrastructure investments, exports and service development, business travel spending in China has grown from $32 billion USD in 2000 to $225 billion USD in 2013, an average of 16.2 percent each year. By comparison, growth in business travel spending from the US has grown at an annual rate of just 1.1 percent since 2000.
The report, which details travel spending in 75 countries, along with the top industries, economic factors and characteristics that influence business travel, finds that record high business travel spending is driven by a few dominant markets – namely the US, China and Western Europe. The Global Annual Report & Forecast also shows that spending in the US and Western Europe will grow more slowly compared to Asia. Currently Asia Pacific owns the largest share of the business travel spend market with 38 percent followed by North America (21 percent) and Western Europe (24 percent). GBTA expects that by 2018, Asia Pacific will have gained another 5 percent in market share, while the US and Western Europe will lose three percent and two percent, respectively.
"This report underscores that China, along with the other BRIC countries of Brazil, Russia and India are leveraging their business travel expenditures into more economic opportunities," said GBTA Executive Director and COO Michael W. McCormick. "We expect to see this shift in business travel spending to continue."
The report's other key findings include:
"This year's global BTI™ predicts single-digit expansion of global spending on business travel and the emersion of the Asia Pacific region as the world's largest travel market, comprising 38 percent of global business travel with two-thirds of that activity coming from China and Japan," said Tad Fordyce, head of Global Commercial Solutions at Visa, Inc. "As global business travel is expected to continue growing in the coming years, China is projected to surpass the U.S. as the top business travel market in the world by 2016."
The Annual Global Report & Forecast identified other key trends that could impact business travel over the next year, including political activity in Emerging Europe and the cost of oil.
CRIMEAN CRISIS GROWTH IMPEDIMENT FOR RUSSIA AND EMERGING EUROPE
Instability in Ukraine is currently the biggest impediment to business travel growth in Emerging Europe and poses a major risk to both the Russian and European economic outlook. An escalating Ukrainian crisis could push Europe and Russia into a recession.
Moreover, Russia – a country that has been on the rise in recent years in terms of business travel spending – could see plummeting business travel activity if the crisis continues. Sanctions from the West aimed at Russia's top officials, businessmen and a few banks are already taking their toll on the Russian economy. GBTA expects business travel spending in Russia will fall more than five percent in 2014.
STABLE OIL PRICES RESULT IN RELATIVELY STABLE AIRFARE PRICES
Oil prices have been stable since mid-2011 at around $100 per barrel. Despite geopolitical risk and crises in the Middle East and Ukraine, supply of crude and refined product has readily kept pace with slowly growing global demand. As jet fuel price tends to move in lockstep with crude oil, this is good news for both carrier profits and airfares.
With this in mind, oil price shocks are always a threat to global growth and business travel. Travel buyers should keep contingency plans close, however, given the ever-present potential for geopolitical crises and their almost instantaneous impact on oil prices.
TOP 15 BUSINESS TRAVEL MARKETS
The GBTA report identified the top 15 business travel markets, ranked by spending in 2013. The United States topped the list ($274 billion USD), followed by China ($225 billion USD) and Japan ($61 billion USD).
The largest growth was seen in three of the BRIC countries - China (15.1 percent), India (10.4 percent) and Russia (8.7 percent).
The full chart can be found on GBTA's website.
The GBTA BTI™ Outlook – Annual Global Report & Forecast report is available exclusively to GBTA members by clicking here and non-members may purchase the report through the GBTA Foundation by emailing firstname.lastname@example.org. To view an abstract of this research, click here.
About the GBTA BTI™ Outlook – Annual Global Report & Forecast
The GBTA BTI™ Outlook – Annual Global Report & Forecast is an exhaustive study of business travel spending and growth covering 75 countries across 48 industries and projects aggregate business travel trends over the next year. The report includes key buy-side metrics such as total business travel volume and spending, plus supply-side projections of changes in costs, across both transient and meetings travel.
The GBTA BTI™ Outlook uses an econometric model created by Rockport Analytics to better inform the forecast process. The model explicitly relates measures of business trip volume and spending to key economic and market drivers of business travel including information from: The U.S. Bureau of Economic Analysis as well as various international government sources such as Ministries of Transportation, Tourism & Commerce, among other components.
About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. Collectively, GBTA's 7,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA provides its growing network of more than 28,000 travel professionals and 125,000 active contacts with world-class education, events, research, advocacy and media. The Foundation was established in 1997 to support GBTA's members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbta.org/foundation.
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