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There’s a big reason the mood was so breezy at the Global Business Travel Association’s (GBTA) annual convention in San Diego this year. The 7,000 business travel professionals on hand were busy, trying to make the most out of an unprecedented period of growth for the sector.
New research from GBTA and Rockford Analytics shows that 2018 will be perhaps the best year on record for the growth of the global business travel sector, signaling an end to the uncertainty that has come to define the industry after the Great Recession.
Last year, business travelers worldwide spent $1.33 trillion, a 5.8 percent increase over 2016. Projections for 2018 show an expected increase of 7.1 percent, the biggest jump since the bounce-back period following the recession in 2010 and 2011. The difference this time is that instead of merely returning to previous levels, the industry is surpassing even its own expectations.
The outlook for the future, though, is less than clear.
“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,” said Michael W. McCormick, GBTA executive director and chief operating officer, in a statement. “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.”
And about that trade policy: the outlook isn’t exactly good. Global trade wars could severely hamper growth in coming years if the U.S., China, and Europe go through with the proposed retaliatory measures that have been discussed publicly by their governments. Projections show that the U.S., and not the countries it is feuding with, has the most to lose from this instability through 2019. The UK is already feeling the effects of Brexit, experiencing a slight decline in business travel.
Furthermore, instability in the global economic marketplace could lead to higher interest rates, meaning corporations spending more to pay down debt and less to send employees around the world.
“Rising protectionism is coming at precisely the wrong time,” states the report. “Trade has been a primary driver of stronger global growth since 2016. The U.S. has imposed tariffs on a number of imported items and proposed significantly more. Opposing countries have quickly retaliated and have readied more should the U.S. follow suit. Meanwhile, Brexit and NAFTA negotiations continue. All this adds up to uncertainty which could derail the recovery.”
Regardless of the warning signs, the organization’s projections remain rosy. Business travel spending growth is expected to hover just under 5 percent over the next three years, with a 5 percent bump figured for 2020.
China and emerging markets worldwide saw the most impactful business travel growth in 2017. India, Brazil, and Russia, in particular, have seen a major impact from increased spending. Japan and the UK saw slight declines.
|Business Travel Spending 2017 Top Markets|
|Total Spending ($ millions USD)||Annual Growth|
Check out the executive summary of the report below.