Chinese business travel spending is expected to grow over the next six quarters despite economic slowdown over the past year, reports the Global Business Travel Association.
China’s economy slowed in step with Europe due to its economy’s dependence on exports, which motivated businesses to redirect their focus towards domestic growth. As a result, domestic travel spending is expected to increase 12.5 percent to $195 billion in 2012 and another 14.7 percent in 2013. On the other hand, international outbound travel is expected to slow to a growth rate of 5.5 percent.
The study reports a reduction, rather than a reversal, of expected travel spend when compared to the report’s first iteration in April.
Business travel spendings’s long term growth
China’s business travel spending grew 16.5 percent since 2000 due to individual business travelers, meetings and conventions, and increased per-trip spending due to trade growth, increased jobs, new businesses, and infrastructure investment. Its travel market is now the second largest in the world and will likely bypass the US by 2014 if current growth rates continue.
Greater growth was hampered by a lack of infrastructure and difficult visa processes in the past; however, China’s four largest airports have doubled in size over the last decade. There are plans for an additional100 new airports to be built in the coming decade. Hotels have also grown to meet demand in major urban areas with the introduction of several global brands, but room rates are expected to increase.