Pent-up demand, return of travel and meetings, improved COVID landscape, stable economic conditions and inflationary factors are all factors in a prediction of accelerated global business travel growth through 2027.
The latest Global Business Travel Association’s Business Travel Index Outlook report says that the global business travel industry has rebounded at a more accelerated rate than expected just a year ago, and is now expected to surpass its pre-pandemic spending level of $1.4 trillion in 2024. The group predicts that business travel spending will grow to nearly $1.8 trillion by 2027.
In 2022, global business travel spending rose 47% to $1.03 trillion, with strong gains continuing and 32% growth expected in 2023. These robust gains were fueled by pent-up demand after the COVID-19 pandemic, more favorable global economic conditions in 2022 and 2023 and recession risks that have yet to happen. Last year’s forecast projected a mid-2026 recovery.
“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, GBTA. “This latest forecast now indicates an accelerated return to pre-pandemic spending levels sooner than anticipated as well as growth ahead in the coming years.
“Business travel spending is a key indicator, but how travel volumes will continue to rebound is yet to be seen,” Neufang added. “The data also reflects the remarkable efforts of the industry to adapt, innovate and thrive despite the challenges, along with the ongoing role and value of business travel to economies, companies and professionals worldwide.”
The Business Travel Index Outlook report said that of the $1.03 trillion spent on global business travel in 2022, roughly $183 billion was spent on air travel. Other expenditures include $395 on lodging, $191 billion on food and beverage, $138 billion on ground transportation and $121 billion in other travel expenses.
The report noted that recovery in business travel continues to vary by region. Western Europe was the fastest growing region globally in 2022. North America and Latin America saw spending growth accelerate significantly in 2022, while Emerging Europe continues to lag in its recovery, challenged by the war in the Ukraine, the report noted.
Regionally, Asia Pacific was the big laggard last year given the delayed reopening of the Chinese economy. Chinese business travel spending fell 4.6% last year, dropping China down to the #2 business travel market in the world for the first time since 2014. However, China is expected to recover back to being the #1 business travel market in the world by the end of 2023.
The Outlook report warned that while a promising rebound is expected, there are several factors that could influence the industry’s longer-term forecast. “An increased focus on sustainability initiatives, widespread adoption of meeting technologies, growth in the remote workforce and the rise of blended travel are potential game changers in the future of business travel,” the report said. It also noted stressors in the global economy, including the war in Ukraine, persistent inflation in certain areas, much tighter global financial conditions and deterioration in the manufacturing sector.