After rebounding at a pace much faster than was anticipated a year ago, the global business travel segment is likely to exceed its pre-pandemic spending level of $1.4 trillion in 2024, a recent study has revealed.
Global business travel spending is projected to grow to roughly $1.8 trillion by 2027, driven by more favorable economic conditions than expected in 2022 and 2023, according to findings from the latest GBTA Business Travel Index Outlook – Annual Global Report and Forecast, published by the Global Business Travel Association along with Visa.
Global business travel spending in 2022 increased 47% to $1.03 trillion. This includes $183 billion in air spend, $395 billion in lodging spend, $191 billion in F&B spend, $138 billion in ground transportation and $121 billion in other travel expenses.
This year, spending is expected to rise 32%.
The good news is that the headwinds expected to affect the recovery of global business travel in the last year did not materialize. The latest forecast predicts an accelerated return to 2019 spending levels sooner than anticipated and growth in the coming years, GBTA CEO Suzanne Neufang said.
“Business travel spending is a key indicator, but how travel volumes will continue to rebound is yet to be seen. The data also reflects the remarkable efforts of the industry to adapt, innovate and thrive despite the challenges, along with the ongoing role and value of business travel to economies, companies and professionals worldwide,” Neufang said.
Global spending will recover to 2019 levels by the end of 2024 faster than the previous forecast of mid-2026, the study said. The significant stability of the global economy has been a major factor in the accelerated rebound of the rebound. Many major economies were predicted to weaken or suffer a recession this year, which is yet to happen.
About 62% of business travelers said they were more frequently blending business and personal travel than they did in 2019, with 42% adding more leisure days to their business trips and 70% of these travelers staying at the same accommodation for business and vacation parts of their trip.
Globally, business travelers estimated their own spending on average, totaling $1,018 per person per trip. On average, business travelers spent $391 on lodging and $189 on food and beverage. Air averaged $182, while ground transportation and miscellaneous expenses stood at $136 and $120, respectively.
RECOVERY VARIES BY REGION
The two biggest factors driving the stabilization of global business travel in the past six months were the return of in-person meetings and events and the recovery of some international business travel capacity and volumes.
Recovery of the segment, however, continues to vary by region. In 2022, Western Europe emerged as the fastest-growing region, led by North America and Latin America. Europe lagged in its recovery, primarily due to the war in Ukraine.
The slow reopening of China weakened the overall recovery in the Asia Pacific. Chinese business travel spending declined by 4.6% in 2022, pulling China down to the No. 2 business travel market globally for the first time since 2014. However, China is projected to recover and claim its top spot in the global business travel market by the end of 2023.
In terms of industry, construction, educational, professional, scientific and technical activities were the most resilient.
GLOBAL ECONOMY
The resilience of the global economy was an important factor in the revival of business travel. However, some challenges will continue in the future, including the war in Ukraine, continuing inflation in some areas, tighter global financial conditions and weakening of the manufacturing sector.
While a promising rebound is likely, some factors could impact the industry’s long-term forecast. An increased focus on sustainability initiatives, adoption of meeting technologies, rise in remote workforce and the increase of blended travel will be game changers in the future of business travel.
“As travel continues to rebound, we expect digital payments to continue to grow because they make it easier and more secure to do things like purchase plane tickets for business travel or split a check at dinner. Visa sits at the center of money movement facilitating commerce across geographies and streamlining payments made when traveling – whether for business or pleasure – domestically or across borders,” said Gloria Colgan, SVP, global head of products, Visa Commercial Solutions.