Business travel spend rising healthily
The Global Business Travel Association (GBTA) has forecast seven-per-cent growth in global business travel spend for the rest of 2018, potentially suggesting an end to a period of major uncertainty.
According to the GBTA BTI Outlook – Annual Global Report & Forecast, global business travel spending grew by 5.8 per cent last year compared with 2016, reaching an overall value of US$1.33 trillion. Should this growth continue, with GBTA’s projected 7.1-per-cent rise coming to pass, a much-discussed ‘era of uncertainty’ could be coming to an end. The GBTA believes that should this trajectory hold steady, global business travel will see its strongest two-year period since the 2010 and 2011 recession – and by 2022, overall spend could be worth $1.7 trillion.
“This pick-up in growth could signify an end to the ‘Era of Uncertainty’ in global business travel, but rising protectionism is coming at precisely the wrong time,” warned GBTA Executive Director and COO Michael W. McCormick. “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.”
Of the various hurdles that could stand in the way of a return to smoother waters, the GBTA points to the potential for trade wars, with aggressive tariff increases and equally aggressive retaliatory action potentially hitting the global economy hard, and damaging global business travel as a consequence. Analysis from the GBTA suggests that as much as 60 per cent of the variability in global business travel spend can be accounted for by global trade volumes.
“This makes sense,” clarified McCormick, “as the movement of goods and services necessitates people, namely business travellers, to support global commerce.”
Looking more specifically at markets, the GBTA expects that India and Indonesia will see the most rapid growth over the next half a decade, with 11.3-per-cent and 8.7-per-cent growth respectively. Sweden and Norway are also expected to see impressive growth.