GBTA: Business travel expected to fully recover by 2024
The recovery in business travel in 2021 has proceeded at a slower and more cautious pace than expected
from a year ago. However, global spending on business travel is expected to increase in 2022 and a full recovery is expected in 2024, ending the year on pace with 2019 pre-pandemic spending of $ 1.4 trillion, and a year ahead of schedule. , according to the Global Business Travel Association. (GBTA), which released the results of its latest business travel index, the BTIOutlook.
The report provides detailed analysis of business travel in 2021 with projections for 2022 and beyond, including predictions of post-COVID-19 recovery. Now in its 13th edition, the BTI Outlook is an annual study of business travel spending and growth covering 73 countries across 44 industries. New additions this year include survey results from top global financial executives as well as business travelers.
Highlights of the forecast and analysis:
- Global business travel activity has started to rebound after the sharp decline caused by the COVID-19 pandemic. After declining 53.8% in 2020 to $ 661 billion, global spending is expected to have rebounded 14% in 2021 to reach $ 754 billion. This was slower than expected in GBTA’s previous BTI Outlook report released in February of this year.
- Despite the setbacks of the recovery in 2021, a 38% year-over-year increase is expected in 2022 as the recovery and pent-up demand shift into high gear, pushing global business travel spending down to over $ 1,000 billion.
- The recovery will continue through 2023, with global spending increasing 23% year-over-year as more international and group travel returns online.
- By 2024, global business travel is expected to make a full recovery, ending the year at $ 1.48 trillion, just above 2019 pre-pandemic spending of $ 1.4 trillion.
- In 2025, global business travel growth is expected to slow to 4.3%, just below the 10-year average growth rate of 5.1% by 2020, to end the year at 1.5 trillion. of dollars.
However, the continuing threats and disruption associated with COVID, tensions in the supply chain, labor shortages, rising inflation, rising costs and slowing recovery on the market. Asian markets are just a few of the risks for the continued recovery on target. In addition, the potential impacts of emerging factors, including the widespread adoption of remote working models, remain to be determined; long-term reductions or elimination of business travel and travel volume; and increased emphasis on sustainability practices and policies for business travel.
“Of all the years we’ve released the BTI Outlook, this was the most anticipated and it’s no surprise,” said Suzanne Neufang, CEO of GBTA. “The business travel industry recognizes that there are factors, related to COVID-19 and beyond, that could impact the road ahead in the coming years. However, optimism reigns overall as industry, businesses and travelers around the world grapple with the much-needed recovery and return to business travel. “
Other key findings from GBTA’s BTI outlook include the analysis of 2021 challenges for the business travel industry as well as the prospects for recovery through 2025.
Business travel faces headwinds in 2021
The global business travel recovery that began in late 2020 has seen a number of bumps in 2021. Pandemic outbreaks, variant introductions, uneven vaccination rates, and growing supply chain challenges have all had negative consequences on previously forecast growth expectations.
North America led the recovery, the United States in particular, rebounding 27% in 2021. Business travel markets in Latin America, the Middle East and Africa (MEA) and Asia -Pacific (APAC) all recorded 15-20% growth in 2021.
European markets are lagging behind in 2021. Emerging Europe is expected to gain only 10% and for the Western European region, business travel spending for 2021 is expected to decline 3.8% from levels of 2020. This is due to the underperformance at the start of the year, but with the recent resurgence, demand for business travel in the region is expected to exceed most other regions of the world, barring related setbacks. to COVID.
The recovery in Asia-Pacific has been slower, due to the late reopening of borders and heavy reliance on international business travel. China’s expected growth was revised down last year due to challenges posed by financial and other issues that could signal greater risks.
Business travel to Latin America performs relatively better in terms of percentages, given that volumes vary widely by region, driven by fewer government restrictions and by travelers’ desire and confidence. to return to business travel. However, rising public debt and interest rates, falling credit scores and falling vaccination rates could pose future threats for business travel to Latin America.
Total spending on business travel: top 15 markets (2021)
The recovery in business travel will also vary by industry. Professional and business services and real estate have held up so far, while wholesale trade has come under attack. Accommodation and catering services; arts; entertainment and recreation; and retail, which was hit hard during the pandemic, is expected to recover sharply during the forecast period.
View from the C-suite
- In a survey of 40 CFOs in North America, Latin America, Asia-Pacific and Europe, 70% estimated that by 2022, their country’s overall economy would be better or much better than it was. 2021.
- About half (52%) of those polled said they expected their company’s business travel spending to reach 2019 levels in 2022.
- When asked about the importance of business travel to their business, CFOs rated the top reasons for business travel ROI as sales and business development (68%), internal planning and strategy management (50%), accounts receivable management (48%) and employee training and development (48%).
Business travelers are ready and willing
- Of the 400 business travelers surveyed around the world, 86% say they need to travel to meet their business goals.
- A majority (81%) believe their domestic business travel volume will be greater than or equal in 2022 than it was before the pandemic.
- More than half (54%) miss travel and hope to travel more often in the future. However, 43% would not hesitate to travel less in the future, whether they indicated they miss it or not.
- About four in five business travelers (81%) say their business needs vaccines for travel and in-person meetings.
Challenges at the pace of the recovery
Global GDP growth is expected to reach 5.8% in 2021 and 4.2% in 2022. If another wave of COVID materializes, China would slow further and / or an energy shortage would intensify, revisions to the additional drops might be needed.
The BTI Outlook describes four conditions necessary for the full recovery of global business travel: 1) the global immunization effort, 2) the national travel policy, 3) the sentiment of business travelers, and 4) the business travel management policy. The recovery remains highly dependent on the deployment of vaccines, the return of employees to the office and the standardization of travel policies at both national and company level. Travel managers will also face the challenge of juggling due diligence with rising costs, sustainability priorities, and new considerations on business travel return on investment.