Grim projections from the usually optimistic Global Business Travel Association, but a lot can happen in four years.
An industry group has predicted it will take four years until global business travel activity returns to pre-pandemic levels.
The bleak projection is being made by the Global Business Travel Association, despite the progress with global vaccination programs.
Skift in its coverage has forecast 2025 as a pivotal year for full recovery across sectors of travel, as highlighted in our recent megatrends report.
In GBTA’s annual Business Travel Index Outlook, which studies business travel spending and growth covering 75 countries across 48 industries, the U.S.-based association said while the distribution of vaccines represents a “critical milestone,” the sector will take a long time to recover from the damage inflicted last year.
It has cited a global recession, constricted trade, mitigation policies, financial blows to travel suppliers and new elements of traveler safety as challenges over the next few years.
Corporate Travel’s scarred Year
For 2020, global spending on business travel is expected to show a 52 percent decrease to $694 billion, down from $1.4 trillion in 2019.
The sharp decline, caused by the pandemic, would reverse a decade of increases that saw an average growth rate of 5.1 percent per year.
Last year, North America and Western Europe are expected to have been most affected, with decreases of 79 percent and 77 percent respectively for the period April 1 to Dec. 31, 2020.
“It’s clear our industry will take some time to recover given the challenges we’re facing on multiple fronts,” said Dave Hilfman, the association’s interim executive director.
In 2020, global trade is expected to contract by almost 11 percent, due to lockdowns that temporarily froze the movement of people and goods and forced a review of supply chain networks, resulting in many countries looking to source locally.
Global gross domestic product is expected to have declined 4.4 percent in 2020. In contrast, during the Great Recession of 2008, there was a 0.5 percent decline.
However, the association said there will be a “snapback” later this year, and in 2022 it predicts a pick-up in group meeting activity and international business travel.
It forecasts a 21 percent gain in business travel spending in 2021, with those gains set to accelerate in 2022 as the world enters the mid-to-late stages of recovery.
Business travel in regions such as the Middle East and Africa, and Asia Pacific, will manage to see positive growth over the period and regain 2019 peaks before the end of 2025, it added. The Asia Pacific region will also help to buoy global travel activity over the next four years.
Annual spending growth will then ease off during 2023 and 2024, but by the end of that year the association said annual business travel spending will have recovered to more than $1.4 trillion.
The BTI Outlook report was conducted in partnership with Rockport Analytics.
Photo credit: Global spending on business travel is expected to show a 52 percent decrease to $694 billion in 2020, down from $1.4 trillion in 2019. Govind Krishnan / Unsplash