by Michael J. Shapiro | August 15, 2018
Global business-travel spending is expected to grow 7.1 percent for 2018, according to the Global Business Travel Association's BTI Outlook -- Annual Global Report and Forecast, released at GBTA Convention 2018 in San Diego this week. That's on top of the strong 5.8 percent growth realized in 2017, equating to $1.33 trillion in spending. By 2022, the report speculates, that number could hit $1.7 trillion.
 
"This pick-up in growth could signify an end to the 'Era of Uncertainty' in global business travel," said Michael W. McCormick, executive director and COO of the GBTA. But his optimism is cautious: "Rising protectionism is coming at precisely the wrong time," he said. "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."
 
The period covering 2017 and 2018 is shaping up to be the strongest two-year stretch for business-travel spending since the post-recession recovery years of 2010-2011. The intervening years -- the so-called "Era of Uncertainty" -- were marked by slow growth of 3 to 5 percent annually. This year, GBTA expects that 18 out of the top 20 business-travel markets will outpace their average growth over the past five years.
 
Still, there could be rain on the parade, GBTA warns in the report. Downside risks that could appear in 2019 include rising interest rates in the United States, which would create increased debt for global borrowers; slowed growth in global markets as a result of maturing business cycles; rising budget deficits in both developed and emerging markets, and, as McCormick pointed out, rising protectionism that could spark global trade wars. Global trade volume and global spending on business travel are historically very tightly correlated, the report points out.
 
World Markets
In Western Europe, Germany, France and Spain all enjoyed strong growth in business-travel spend last year; a decline in spend in the United Kingdom was the only major drag. The U.K. decline can be attributed in large part to the Brexit vote fallout -- resulting in a weakening pound, higher inflation and spending pressure -- and the final terms of the country's withdrawal from the European Union are likely to affect the growth rate significantly for the region as a whole.
 
The report projects India and Indonesia will be the fastest-growing markets over the next five years, by 11.3 percent and 8.7 percent, respectively. India surpassed South Korea last year to become the world's seventh-largest business-travel market, and GBTA expects the country to crack the top 5 by 2022.
 
China remains the world's largest business-travel market, with US$346.5 million in annual spend, compared with $292.3 million in the second-place United States. Despite slowed growth in China, GBTA expects it to be the fifth-fastest-growing market over the next five years, and to retain the top spot in spending. World market share continues to shift slightly, with North America's share decreasing and Asia Pacific's gradually rising.
 
A free preview of the research is available here. GBTA members can download the report here and nonmembers can purchase the report for $499 by emailing Paul Yachnes.