Tracking Business Travel’s RecoveryApril 11, 2022

April 11, 2022

Tracking Business Travel’s Recovery

Neufang,-Suzanne-GBTA-110x140Suzanne Neufang is CEO of the Global Business Travel Association, the world’s premier business travel and meetings trade organization, whose members manage more than $345 billion of global business travel and meetings expenditures annually. She oversees the staff, services and mission to provide value to GBTA’s members and partners, and has also been at the forefront of pandemic recovery for the organization and industry.

We used to know the rules of the road when it came to business travel: where travelers could go, how they could get there and the steps needed to make it happen. But the COVID-19 pandemic has been the great disruptor. The past two years have shown we can’t truly predict the patterns of a pandemic, but hopefully, we are getting better at navigating COVID-related developments.

If you’re looking for positive signs of business travel’s thoughtful recovery, they’re here. However, yet to be determined are the potential impacts of emerging factors including oil and fuel prices, rising inflation, supply-chain strains, regional conflicts, broad adoption of remote working models, and the increased focus on sustainability practices and policies for business travel.

Helping the industry understand and navigate the current and future state of business travel is one of the main missions of our GBTA research, and specifically, of our annual business travel index — the BTI Outlook. Now in its 13th edition, the BTI Outlook is an exhaustive study of business travel spending and growth covering 73 countries across 44 industries. The report provides a detailed analysis of business travel in 2021 with projections for 2022 and beyond, including post-COVID-19 recovery forecasts. GBTA will again update and reveal the next BTI report in November 2022 at the GBTA Convention in San Diego, August 14-17.

Our November 2021 BTI Outlook forecast was one of the most anticipated. It’s no surprise that the business travel industry recognizes there are factors, related to COVID-19 and beyond, that could impact the road ahead over the coming years. However, there is optimism overall as the industry, companies and travelers worldwide lean into recovery and the much-needed return to business travel.

Business travel recovery in 2021 proceeded at a slower, more cautionary pace than forecast the year prior. However, global business travel spending is expected to surge in 2022 with full recovery expected in 2024 — ending the year on pace with the 2019 pre-pandemic spend of $1.4 trillion, and a year sooner than previously forecast.

Forecasts and analysis highlights from the latest BTI Outlook (in US dollars): Despite recovery setbacks in 2021, a year-over-year surge of 38% is expected in 2022 as recovery and pent-up demand kicks in, bringing global business travel spending back to over $1 trillion.

Recovery will continue into 2023, with global spending rising 23% year-over-year as even more international and group travel comes back online.

By 2024, global business travel is forecast to have made a full recovery, ending the year at $1.48 trillion, or just above the 2019 pre-pandemic spend of $1.4 trillion.

In 2025, global business travel growth is forecast to slow to 4.3% — just below the 10-year average growth rate of 5.1% coming into 2020 — ending the year at a forecasted $1.5 trillion. Other key findings from GBTA’s BTI Outlook include analysis of 2021 challenges for the business travel industry as well as recovery outlook into 2025.

Business Travel Faced Headwinds in 2021

The global business travel recovery that began in late 2020 hit a fair number of bumps in 2021. Pandemic surges, variant introductions, uneven vaccination rates and mounting supply chain challenges all took their toll on previously forecast growth expectations.

North America led the recovery, the U.S. in particular, rebounding 27% in 2021. Business travel markets in Latin America, Middle East and Africa (MEA), and Asia-Pacific (APAC) all picked up 15% to 20% growth in 2021.

European markets lagged in 2021. Emerging Europe was expected to gain only 10%, and for the region of Western Europe, business travel expenditures for 2021 were expected to fall 3.8% from 2020 levels.

Recovery in Asia Pacific has been slower, due to lagging border reopenings and a high dependence on international business travel. China’s expected growth was impacted by challenges posed by financial and other issues which could signal larger risks.

Business travel in Latin America performed relatively better in terms of percentages — recognizing that volumes vary significantly across global regions — boosted by fewer government restrictions, and travelers’ desire and confidence to return to business travel. However, rising public debt and interest rates, declining credit ratings and lower vaccination rates could pose future threats for Latin American business travel.

Total Business Travel Spending — Top 15 Markets (2021)

Business travel recovery will also vary by industry. Professional and business services and real estate have been resilient to date, while wholesale trade has been challenged. Accommodation and food services, arts, entertainment, recreation and retail trade, which were significantly impacted during the pandemic, are expected to recover sharply over the forecast period.

View From the C-Suite

In a poll of 40 CFOs across North America, Latin America, Asia-Pacific and Europe, 70% think in 2022 the overall economy in their country would be better or much better than in 2021.

About half (52%) of respondents reported they expect their company’s business travel spend to reach 2019 levels in 2022.

When asked about the importance of business travel for their company, CFOs think the top return-on-investment reasons for business travel are sales and business development (68%), internal business planning and strategy (50%), client account management (48%), and employee training and development (48%).

Business Travelers Are Ready and Willing

Among 400 global business travelers polled, 86% report that they need travel to accomplish their business goals.

A majority (81%) think their volume of domestic business travel will be greater or on par in 2022 than it was prior to the pandemic.

Over half (54%) miss traveling and hope to travel more often in the future. However, 43% wouldn’t mind traveling less in the future, whether they indicated they miss it or not.

Four in five (81%) of business travelers say their company requires vaccines for travel and in-person meetings.

Challenges to the Pace of Recovery

The BTI Outlook outlines four conditions necessary for full recovery in global business travel: 1) the global vaccination effort, 2) national travel policy, 3) business traveler sentiment and 4) corporate travel management policy.

The recovery remains highly dependent on the vaccine rollout, employees’ return to the office, and a normalization of travel policies on both the national and corporate levels. Travel managers will also face the challenge of juggling duty of care with rising costs, sustainability priorities and new considerations on the ROI of business travel. C&IT

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