The latest Global Business Travel Association (GBTA) Business Travel Index (BTI) Outlook for 2020 to 2024 forecasts business travel spending growth of 21.2 per cent this year after a drop of 51.5 per cent in 2020.
The 12th¬†Annual Global Report & Forecast Prospects for Global Business Travel 2020-2024 study, conducted in partnership with Rockport Analytics, also forecasts business travel spending growth of 37.6 per cent, 11.4 per cent and 8.6 per cent in 2022, 2023 and 2024 respectively.
The research ‚Äď which covered 73 countries across 44 industries, published in January and released in early February ‚Äď revealed that most of the gains are likely to come towards the end of the year with the ramping up of global vaccination against Covid-19.
The authors said: ‚ÄúThese gains will accelerate in 2022 as the world enters the mid-to-late stages of recovery. This includes a significant pickup in group meeting activity and international business travel.
‚ÄúWe expect annual spending growth to slow in 2023 and 2024, but to remain well above the historical average growth with annual business travel spending eclipsing US$1.4 trillion by the end of 2024 just below its pre-pandemic peak of US$1.4 trillion.‚ÄĚ
The economic outlook for China and other Asian economies is brighter, they added, as the economic shock came early and the region has been largely successful in combatting the spread of the virus.
‚ÄúFor countries such as South Korea, Singapore, Japan and Australia, trade links to China should boost their 2021 recoveries,‚ÄĚ the report noted.
The Summary of Spending Growth by Country to 2024 show Vietnam increasing by 10.5 per cent followed by China at 6.4 per cent and Bangladesh at 5.5 per cent. In contrast, spending growth in Hong Kong is forecast to shrink 21.8 per cent, Singapore by 18.7 per cent and Thailand 16.7 per cent.
Findings from GBTA‚Äôs December 2020 member polling on the change in the allocation of budget show conferences, tradeshows and industry events expected to see the largest downward adjustment in budgets from 2019 to 2021 at minus five per cent; followed by internal company meetings with colleagues, at minus six per cent, as many will likely be moved online.
On the other hand, sales and service/support trips will both take on a larger share of travel budgets in 2021, at six per cent and five per cent respectively.
Given the extreme uncertainties surrounding the global recovery, the report also provides two global forecast scenarios ‚Äď one optimistic and one pessimistic.
In the optimistic scenario, global inoculation occurs much faster than anticipated, corporate travel policy allows employees to get back on the road sooner than expected, countries open up their borders to inbound travellers and pent-up demand from missing over a year of critical business interactions sends business travel activity soaring back.
In this scenario, global business travel spending is expected to reach nearly US$1.6 trillion in 2024, 11 per cent higher than the pre-pandemic peak.
In the pessimistic scenario, the vaccine rollout is slower than expected and firms remain reticent to send workers back on the road. The rapid adoption of online meeting technology leads firms to be more cautious in sending employees out and less critical business trips are substituted for virtual meetings. In this scenario, global business travel spending is expected to reach only US$1.2 trillion by 2024.
Shifts in business travel activity by industries also show the most heavily impacted sector has been accommodations and food services activities with business travel in the sector plummeting an estimated 65 per cent globally in 2020.
Other heavily impacted sectors include administrative and support services, transportation and warehousing, and finance and insurance. Sectors that have fared better through the pandemic include real estate services, education, manufacturing and information and technology.