The Global Business Travel Association (GBTA) Foundation has the results of its latest GBTA BTI Outlook – China report, a semi-annual analysis that relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market. The report, sponsored by Visa Inc., includes the GBTA BTI; an index of business travel spending that distills market performance over a period of time.
Key highlights of the report include:
“The unprecedented growth in China’s economy has propelled the country’s business travel market to represent roughly 20 percent of global business travel spending,” said Welf J. Ebeling, regional director for GBTA Asia. “The continuation of China’s robust domestic economic growth is dependent on increased consumption. Chinese authorities are focused on maintaining these current levels of economic growth while continuing to execute a long-term strategy to rebalance the economy to be less dependent on exports and investments and more focused on consumption.”
Over the last decade, China’s largest airports have doubled in size, and the construction of additional airports continues, including Beijing’s second international airport, slated to begin this year and open in 2018. In addition to airports, data from Lodging Econometrics shows 70 percent of the total room pipeline in Asia Pacific can be attributed to China as Beijing alone currently has 95 projects totaling 13,574 rooms. There is evidence, however, that the balance in the supply and demand for hotel rooms in China may be shifting as supply starts to catch up with demand.
Ongoing challenges exist in China’s manufacturing and real estate sectors — yet the economy will continue to advance at rates above 7 percent through 2015. Many media discussions call the housing sector China’s economic Achilles’ heel believing that China’s rapidly rising debt-to-GDP ratio and falling housing prices will lead to a debt-inspired collapse of the Chinese economy forcing a recession among its key trading partners. Unlike the U.S. housing collapse in 2006, however, China’s situation is dramatically different as there is less leverage, more equity and more policy weapons to soften the blow of falling asset prices. The real estate market bears watching, but its imminent collapse is unlikely.
Given that as much as 40 percent of the economy is dependent upon exports, strengthening exports is welcome news, as GBTA believes its importance is underestimated and overshadowed by the current media focus on real estate risk.
In addition to the report, GBTA Asia also is pleased to announce the launch of a new website created specifically for business travel managers and suppliers in China. Available in both Mandarin and English, the GBTA China site will allow users to view news, tools and other information relevant to the China travel market, helping travel managers in China to excel in their role as a business travel professional.
The GBTA BTI Outlook – China is free of charge to all GBTA Members. Non-members may purchase the report through the GBTA Foundation by emailing pyachnes@gbtafoundation.org.