Thursday, July 25, 2024
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The global business travel industry (GBTA) is poised for a significant recovery, with spending projected to reach a record $1.48 trillion in 2024. It will surpass the pre-pandemic peak of $1.43 trillion in 2019.
The latest GBTA Business Travel Index (BTI) Outlook, published by the Global Business Travel Association (GBTA) and Visa, provides a comprehensive forecast of business travel spending and growth covering 72 countries and 44 industries.
This year’s report also includes insights from a survey of 4,700 business travelers across five global regions, highlighting trends in travel preferences, behaviors and spending patterns.
Economic stability and pent-up demand fuel growth
The recovery in business travel spending is attributed to relative economic stability and pent-up demand, which has encouraged CEOs and CFOs to resume business travel.
Many top business travel markets have almost returned to pre-pandemic levels, strengthening the sector’s recovery momentum.
Despite this positive outlook, the industry faces potential challenges, including economic fluctuations, technological advances and sustainability issues.
Suzanne Newfang, CEO of GBTA emphasized the sector’s adaptability, saying, “We are witnessing an expected recovery in the sector, which reflects the resilience and adaptability of businesses and the value of business travel around the world.
With projected spending expected to continue to grow through 2028, the future of business travel looks promising.
Regional and sectoral variations in recovery
Recovery of business travel expenses varies significantly by region.
In 2023, Asia Pacific emerged as the fastest growing region with a 36% increase in spending, followed by Western Europe (33%) and North America (25%).
The US, Middle East, Africa and Latin America led the recovery, achieving 100% or more of 2019 spending levels. For 2024, China and the US could become the top two markets for business travel spending.
Business travel expenses also vary across industries.
The financial and insurance sectors are expected to experience the most significant expansion (72%) through 2028, while the retail trade and agriculture sectors are expected to see the least growth.
Estimated Cost Breakdown
In 2023, global business travel spending amounted to $1.34 trillion, with accommodation accounting for $501 billion, air travel $282 billion, food and beverage $245 billion, ground transportation $165 billion, and other travel expenses $142 billion (GBTA).
These figures highlight the diverse nature of business travel spending and the different sectors benefiting from the industry’s recovery.
Future Outlook and Potential Risks
While the forecast for business travel is optimistic, several factors could affect the industry’s long-term growth.
Persistent inflation, geopolitical tensions, industry workforce challenges and natural disasters are potential threats that could change the current trajectory.
Additionally, the increased focus on corporate sustainability may influence business travel practices and spending.
Business travelers’ preferences and spending
GBTA’s survey of 4,700 business travelers shows a global increase in business travel spending, with 64% reporting higher spending compared to 2023.
However, more than a third reported more restrictive travel policies since the pandemic.
On average, business travelers spend $834 per trip, including accommodation ($312), meals ($153), airfare ($176), ground transportation ($103), and miscellaneous expenses ($89).
Role of Digital Payments in Business Travel
Digital payments are revolutionizing the business travel experience, making transactions more seamless and secure.
Visa’s head of commercial solutions, Veronica Fernandez, noted that the adoption of digital payments is leading to smoother transactions, increased efficiency and convenience for business travelers worldwide.
A strong road to recovery?
The global business travel industry is on a strong path to recovery, with spending expected to surpass pre-pandemic levels by the end of 2024.
The industry’s adaptability, along with favorable economic conditions and technological advances, bode well for continued growth.
However, stakeholders must remain vigilant and adaptive to potential headwinds as they navigate this period of stabilization and growth.