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Some airlines are still blaming Brexit for a business slump, but a new report says business travel is still growing in Europe’s largest markets despite the surprise decision of UK voters to leave the European Union earlier this year.
“While trips and spending have been bounded by slower European and global economic growth, Brexit’s influence has been negligible thus far,” Catherine McGavock, GBTA regional vice president for Europe, the Middle East, and Africa, said in a statement. “Businesses and business travelers continue to show their resilience and ability to adapt as Europe has faced an array of challenges recently, but business travel remains strong.”
According to the outlook from the education and research branch of the Global Business Travel Association, business travel spending in Western Europe is expected to increase 6 percent this year to $210.7 billion, and another 4.7 percent in 2017. The report included projections for Germany, the United Kingdom, France, Italy, and Spain.
The expected increases are healthier than projections in the United States, where spending is expected to fall slightly this year and grow by 3.8 percent next year. Still, the Western Europe numbers are a bit lower than they were in the most recent forecast.
Germany is expected to see the biggest gains in spending through 2017, followed in order by Spain, the UK, France, and Italy.
Despite the near-term projections, GBTA believes there could be hard times ahead as the implications of the referendum become more clear. There is likely to be new uncertainty as negotiations over the exit from the European Union progress. Air travel prices could increase and mobile roaming charges could come into play. The UK could put extreme visa requirements into place, and other countries in the EU could follow suit. Health coverage could be complicated during travel. And the report warns that restrictions on where EU citizens can work could have “profound” impacts on business travel.
“The shock of the recent Brexit vote may finally be wearing off, but the true economic and political impact of Brexit on United Kingdom’s economy is still largely unknown,” the report said.
Next year, business travel spending growth in the UK is expected to slow to 2.4 percent after increasing 6.9 percent this year.
According to the report: “The downside risk becomes more palpable next year, as many firms are likely to postpone or reduce investment, which could lead to a slowing British economy.”