GBTA’s annual business travel index set the year 2025 as global business travel volumes would surpass its peak of $ 1.4 trillion in 2019 after being toppled in 2020 by the Covid-19 pandemic, which the study estimates global business volume year on year decreased by 51.5 percent. That’s 10 times worse than business travel losses after September 11th or the Great Recession in 2008. GBTA partnered with Rockport Analytics to produce the report.
Chris Ely, GBTA’s research director, said 2021 will continue to be a “year of survival” for the business travel industry, but the recovery towards the second half of the year should provide a significant boost. The study projected global business travel volume to grow 21 percent in 2021, followed by around 38 percent growth in 2022, which would catapult global business travel spending to $ 1.2 trillion but is still not fully recovered.
“That’s huge growth again,” said Ely of the forecast for 2022. “Business travel is a key component of the economy. As companies dig themselves out and seek new customers, business travel kicks in.”
The study predicted that companies would prioritize early recovery trips in 2021, followed by service and repair trips to existing customers. According to the study, internal meetings would take precedence over external conferences, events and trade shows, while travel for employee training and supplier meetings would be less important, especially given virtual alternatives.
Ely underlined that “business travel is a key component of the economy,” but it won’t be the first driver of the recovery. “Governments are pumping money into their economies,” he said. This type of stimulus, combined with effective vaccine distribution and vaccination programs, must come first, according to the study, and the markets that dominate these elements will regain business travel volume faster. The report pointed to China and other Asia-Pacific markets as role models.
Despite the challenges, Dave Hilfman, GBTA’s interim executive director, was optimistic about a full recovery in the industry. “We have seen domestic travel in China recover almost completely. We can see similar results as we make our way through this year,” he said.
International travel, Hilfman admitted, would take longer. “We need vaccines and standard Covid tests to open borders. I like to be action-oriented, but now we have to be patient when vaccines are introduced and we begin to take control of the virus.”
Regional analysis
The GBTA report analyzed the global markets based on eight factors to determine the projections through 2024: the size of the economy; Land mass, population and business dispersion; Industry mix; Business travel technology and productivity; Export dominance; physical location; Infrastructure; Environment, tax, safety and health regulation policy. Per global region, the study predicted the following:
Asia Pacific
In the Asia-Pacific region, the decline in business travel in 2020 was comparatively smaller than in most other regions. The decline was 44 percent from 60 percent in North America and 58 percent in Western Europe. The researchers also found that the region will recover faster. China’s early infections, followed by strong lockdowns, resulted in a comparatively rapid recovery in Covid infection rates in the second quarter. The study estimated the 38 percent decline in business travel in China in 2020, driven by the country’s historically strong domestic demand, which largely rebounded in the fourth quarter. “Among the hardest hit markets in the region are those that depend on international business travel, such as Singapore, which will decline 82 percent in 2020,” the researchers wrote. “Business travel in Hong Kong will also decrease by 84 percent in 2020.”
Europe
Western Europe: Researchers predicted a 58 percent decrease in business travel to Western Europe from 2019 ($ 335 billion). The region has been badly hit by the pandemic and continues to grapple with new virus varieties as well as vaccine distribution disputes that emerged over the past week. Another factor that weighs on business travel spending in Western Europe is “the reliance of many companies and countries on intra-regional travel and economic activity. The dizzying array of country restrictions and guidelines from the start of the pandemic made it very difficult for travelers to follow “wrote the researchers. Though not mentioned in the report, Brexit has increased the complexity of business travel to and from the UK, including documentation requirements that could hamper business travel that would otherwise have quickly recovered.
Emerging Europe: Research authors have divided Europe into two segments. In “Emerging Europe”, which includes countries such as Romania, Russia, Poland, Turkey and the Ukraine, the number of business trips fell by 48 percent in 2020 to 29.7 billion US dollars and recovered again by 2024 peaked at $ 57.2 billion in 2019.
Latin America
Business travel volume in Latin America has already struggled with the pandemic, falling to $ 50 billion in 2019. The political crisis in Venezuela and the ongoing recessions in Argentina and Ecuador exacerbated with the early emergence of Covid-19 in Brazil in February 2020 to weaken business travel performance in the region. However, heavy domestic business travel as well as fewer travel restrictions in the region have spared some business travel overall. Volume fell 45 percent from 51.5 percent worldwide. The researchers predicted that similar drivers would help the region regain business travel volume at an average growth rate of 1.4 percent per year through 2024, slightly faster than the projected global pace of -0.4 percent.
Middle East and Africa
The Middle East and Africa region saw strong growth in business travel through 2020. The region recorded growth of 7 percent in 2018. An additional 2.6 percent growth in 2019 put total business travel spending for the region at $ 27 million. According to the GBTA report, the 2020 business travel declines were less severe in the region than other markets, mainly due to lower Covid-19 case rates compared to North America and Europe. The researchers also cited less discretionary business travel, meaning the business travel that took place was directly related to business operations. Given these factors, the researchers expected the MEA region to recover an average of 4.3 percent per year between 2019 and 2024, outperforming all other regions. Recent reports of highly contagious variants of Covid-19 in South Africa, a major business travel market in the region, could hamper this pace of recovery.
North America
According to the GBTA report, business travel spending in North America was nearly $ 347 billion in 2019, with the US accounting for more than 90 percent of that spending. However, the U.S. was hard hit by the pandemic, and the number of cases and hospitalizations continued to grow through 2021. Tense international trade relations, particularly with China, had already hampered the growth of business travel in this market. The researchers predicted that business travel in North America would see the largest declines in the world in 2020, particularly in the US, where the report put a 61 percent decline in 2020. According to the researchers, business travel would drop by 51 percent in Canada and a comparatively modest 44 percent decrease in Mexico. The report highlighted the role of government and administrative change in the US as a catalyst for business travel recovery, citing the likelihood that the Biden administration “has much more liberal trade and immigration policies” and a coherent strategy For public safety, it is hoped that this will include a “coordinated vaccination campaign in the US and North America”.
Researchers struggled to assess 2020 damage and project volume for 2021 and beyond. The association delayed publication of the study amid volatility in the travel environment, and the report used data from many additional sources to validate trends and projections, GBTA’s Ely told BTN.
“The ‘rules’ of travel – if you want to call them that – change daily. If you look at X in relation to Covid, it is different a week later,” Ely said. “Governments are creeping up
[understand economic recovery] and plan a course and because it changes so quickly you have to wonder how good the information is that you are getting. The good news is that this year we had more data sources than ever before. We have received additional information on business travel and bookings on a global basis.
The 2019 BTI, released in July ahead of the GBTA Congress in Chicago, predicted slower growth for the segment, but estimated total global travel spending at $ 1.51 trillion in 2020. The Covid-19 pandemic reversed fate the entire travel industry. The latest report put global business travel spending in 2020 at $ 694 billion.
