While the recovery of business travel in 2021 has proceeded
at a slower pace than predicted last year, global business travel spend is
expected to surge in 2022 and fully recover by the end of 2024 – a year earlier
than originally anticipated, according to a survey by the Global Business
Travel Association.
The results of the 13th annual BTI Outlook, the
GBTA’s annual study of business travel spending and growth covering 73
countries and 44 industries, found that after a sharp 53.8 per cent decline in
spending to US$661 billion in 2020, global expenditures are predicted to have
rebounded 14 per cent in 2021 to $754 billion. This recovery happened more
slowly than forecast in the last BTI Outlook, which was published in February
this year.
North America – the US in particular – led the recovery,
with spend rebounding 27 per cent in 2021, with markets in Latin America,
Middle East and Africa, and Asia-Pacific all picking up 15 to 20 per cent growth.
Europe lagged behind the rest of the world, only gaining 10 per cent this year.
The situation is worse in Western Europe, where expenditure for 2021 are
expected to fall 3.8 per cent from 2020 levels. According to the GBTA, this
stems from underperformance earlier in the year, but business travel demand in
the region is set to outpace most other parts of the world, barring any further
pandemic-related setbacks.
Despite this slow start, survey respondents are predicting a
year-on-year spending surge of 38 per cent in 2022 as travel’s recovery and
pent-up demand kicks up a notch, potentially bringing global business travel
spend back to more than $1 trillion. This trend will continue in 2023, with spending
rising 23 per cent as more international and group travel returns. By the end
of 2024, the numbers are expected to make a full recovery to just above
pre-pandemic levels at $1.48 trillion.
This growth is forecast to slow in 2025 to a more modest 4.3
per cent, ending the year at $1.5 trillion.
However, challenges remain on the road to recovery, with
survey respondents pointing out factors such as persistent Covid-related
threats and disruptions, supply chain issues, labour shortages, rising
inflation, increased costs and lagging recovery in Asian markets as key risks
for on-target recovery.
The GBTA said it is also yet to be determined how the broad
adoption of remote working, long-term cuts or elimination of business trips and
travel volume, and the increased focus on sustainability practices and policies
might impact spending levels.
Suzanne Neufang, CEO of the GBTA, said: “Of any year we’ve
issued the BTI Outlook forecast, this one was the most anticipated and it’s no
surprise. The business travel industry recognises there are factors, related to
Covid-19 and beyond, that could impact the road ahead over the coming years.
However, there is optimism overall as the industry, companies and travellers
worldwide lean into recovery and the much-needed return to business travel.”
Credit: GBTA BTI Outlook
Different perspectives
This year’s index featured for the first time views from C-Suite level finance professionals
and business travellers.
In a poll of 40 CFOs across North America, Latin America,
Asia-Pacific and Europe, 70 per cent said they feel the overall economy in
their country would be better in 2022 than it has been in 2021. Encouragingly,
about half (52 per cent) believe their company’s travel spend would reach 2019
levels in 2022.
When asked about the importance of business travel to their
organisation, CFOs felt top return-on-investment factors are sales and business
development (68 per cent), internal business planning and strategy (50 per
cent), client account management (48 per cent) and employee training and
development (48 per cent).
Meanwhile, among 400 global business travellers surveyed, 86
per cent agree they need to travel to accomplish their business goals.
Eighty-one per cent believe their volume of domestic travel will be greater or
on par with pre-pandemic levels in 2022.
While more than half (54 per cent) said they miss travelling
for work and hope to do so more often in the future, 43 per cent said they
would not mind travelling less, whether they indicated they miss doing so or
not.
Around four in five business travellers said their employer now
requires Covid-19 vaccines for travel and in-person meetings.
Challenges ahead
While global GDP growth is expected to reach 5.8 per cent this year and 4.2 per
cent in 2022, downward revisions could be caused by another wave of Covid,
further deceleration in the Chinese market, or a worsening of the energy
shortage experienced in recent months.
The BTI Outlook lays out four conditions necessary for the
full recovery of business travel. These are:
- 1.The global vaccination effort
- 2.National travel policy
- 3.Business traveller sentiment
- 4.Corporate travel management policy.
The GBTA said recovery is heavily dependent on the global vaccine
rollout, employees’ return to the office and a normalisation of travel policies
on both the corporate and national levels. Travel managers are also now facing
the challenge of balancing duty of care with rising costs, sustainability
priorities and new considerations on the ROI of business travel.
The BTI Outlook was conducted in partnership with Rockport Analytics and HRS.