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Global spending on business travel will hit $1.4 billion next year, surpassing receipts in 2019 for the first time since the coronavirus pandemic, according to projections from the Global Business Travel Association (GBTA).
The trade association’s latest Business Travel Index Outlook report is more optimistic than the forecast published last August, which projected that business travel spending would be dragged down by inflation and supply chain issues and wouldn’t recover until 2026.
The GBTA revised its forecast after travel spending “rebounded at a more accelerated rate than expected just a year ago,” it stated in the report.
Photo: Business Class, Boeing 787-9 Dreamliner. Courtesy of Air New Zealand
“The headwinds that were anticipated to impact the rebound of global business travel over the past year didn’t materialize, and that is good news,” said Suzanne Neufang, CEO of GBTA.
Total business travel spending rose by 47% to $1.03 trillion in 2022, shaking off two years of quarantines, closed borders, and Zoom meetings. Accommodation accounted for 38% of those receipts, and food and beverage spending for 19%. 18% of travel went on air travel, while 13% was spent on ground transport.
Business travel expenditures are expected to rise by a further 32% in 2023, buoyed by pent-up demand, the return of in-person meetings and events, sunnier economic conditions, and subsiding fears of recession. Inflationary pressure on prices also contributes to receipts growth, with spending outpacing travel frequency.
GBTA further forecasts that business travel spending will rise to $1.8 trillion by 2027. However, the association warned that the expansion of remote working could slow growth, the widespread adoption of virtual meeting technologies, and increased focus on sustainability initiatives.
Photo: Unsplash+ In collaboration with Getty Images
Additionally, some regions and industries show more robust business travel spending growth than others. In 2022, business travel bills surged by 109% in Western Europe, following a weak 2021, and thrived in North America (73%) and Latin America (63%).
However, professional travel outlays grew by just 25% in Emerging Europe, stricken by the war in Ukraine, and by only 15% in Asia Pacific, dampened by continuing pandemic restrictions in China.
Chinese business travel slumped by 4.6% last year, with the country forfeiting its position as the most significant business travel market globally for the first time since 2014. However, GBTA expects China to regain that top position in 2023, with 39% growth and $360 billion in spending.
Photo: Courtesy of Andrea Natali Otji / Unsplash
Meanwhile, business travel has shown the greatest resilience in the construction, education, and professional, scientific, and technical activities sectors.
GBTA also surveyed 4,700 business travelers worldwide and found that the average spend on a trip is $1,018 per person.
Blended or bleisure travel continues to grow in popularity, with 62% of travelers mixing business and pleasure more frequently than they did in 2019. 42% are taking leisure days onto their business trips, and 79% are staying in the same accommodation for their trip’s professional and vacation segments.
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