The global business travel industry is on its way toward full recovery to 2019 pre-pandemic spending levels of US$1.4 trillion, but recovery has hit some headwinds.
Just as many Covid-related recovery conditions have improved, many macroeconomic conditions deteriorated rapidly in early 2022. These include persistent inflation, high energy prices, severe supply chain challenges and labour shortages, a significant economic slowdown and lockdowns in China, and major regional impacts due to the war in Ukraine, as well as emerging sustainability considerations.
These new developments are impacting the timing, trajectory and pace of business travel’s recovery, both globally and by region, pushing the forecast for full recovery into 2026 instead of 2024 as previously forecasted.
This is a central finding from the latest 2022 GBTA Business Travel Index Outlook – Annual Global Report and Forecast published by GBTA and Mastercard, unveiled at the 2022 GBTA Convention.
The GBTA BTI is an annual exhaustive study of business travel spending and growth covering 73 countries and 44 industries. Now in its 14th edition, this latest report outlines the top-level outlook for global business travel 2022 to 2026.
The 2022 BTI also reveals insights from GBTA’s recent surveys of global finance executives and business travellers. Additionally, it explores new and transformative factors in global business travel in the areas of sustainability, workforce dynamics (including remote work and blended travel or “bleisure”), and technology adoption.
Highlights from the latest BTI Outlook include:
Total spending on global business travel reached US$697 billion in 2021, 5.5% above the pandemic-era low of 2020. Last year was nearly as challenging as 2020 for the global business travel industry, as it sought to carve out a “normal following” the Covid-19 pandemic. The industry gained back roughly US$36 billion of the US$770 billion lost in 2020.
Recovery was short-circuited by the Omicron variant and spike in global Covid cases in late 2021 and early 2022. As case numbers began to retreat, business travel surged. Global business travel spending in 2022 is expected to advance 34% over 2021 levels to US$933 billion, recovering to 65% of pre-pandemic levels.
Recovery in 2022 was dependent upon and has been largely driven by improvement in the four factors of global business travel recovery – the global vaccination effort, national travel policies, business traveller sentiment, and travel management policy – where conditions have improved significantly in the last six months.
Deteriorating economic conditions and shifting secular trends in 2022, however, have slowed global recovery. Hence, global business travel will almost reach pre-pandemic levels in 2025, reaching US$1.4 trillion.
Global spending is not expected to make it fully back to the US$1.4 trillion dollar mark until mid-2026, when it is forecast to reach US$1.5 trillion dollars. This adds an estimated 18 months to the industry’s recovery than was forecast in the previous GBTA Business Travel Index released in November 2021.
The divergent recovery in global business travel continues
In all, global business travel spending is expected to gain 33.8% in 2022, however, differences are anticipated across the world’s top business travel markets. The timing and pace of the recovery will continue to vary significantly from one region of the world to the next, as evidenced in 2021.
North America led the recovery in 2021 – driven largely by rapidly returning domestic travel. Western Europe was the one region to witness spending declines last year as Covid-19 impacted its domestic and regional business travel market. Both regions are expected to experience the sharpest recoveries with compound annual growth increases of 23.4% (to US$363.7 billion) and 16.9% (to US$323.9 billion), respectively by 2026.
Business travel spending in Latin America grew modestly in 2021 as the vaccination effort got off to a slower start. While there may be challenges in this region over the next few years, 55% growth in spend in Latin America is forecast for this year as business travel recovers to 83% of pre-pandemic totals.
Asia-Pacific helped lead the industry in terms of recovery of spend in 2021– particularly in China. This reversed in 2022, as China’s Zero-Covid policy led to wide-scale lockdowns and other countries in the region only slowly opened up. For 2022, a solid increase of 16.5% (or US$407.1 billion) in spending is expected in APAC (held back by China at 5.6%, or US$286.9 billion), with the region recovering to 66% of pre-pandemic levels by the end of 2022.
Challenges and opportunities
In July 2022, GBTA surveyed over 400 frequent business travelers and nearly four dozen executive travel budget decision makers across four global regions. The overall sentiment is positive, but also confirms Covid concerns are taking a back seat to current macroeconomic and geopolitical issues.
- 85% of business travellers surveyed said they definitely need to travel to accomplish their business goals. Over three-fourths said they expect to travel for work more or much more in 2023 than they did in 2022.
- 84% of senior global corporate finance professionals voiced confidence their travel spending would somewhat or significantly increase in 2023 compared to 2022.
- 73% of business travellers and 38 of 44 senior global financial executives agree inflation/rising prices will impact travel volumes.
- 69% of business travellers and 33 of 44 global financial executives are concerned a possible recession will impact travel.
- 68% of business travellers and 36 of 44 financial executives expect Covid infection rates and variants to have an impact on their travel.
GBTA members can download a full copy of the BTI Outlook on the GBTA members-only hub. The report was conducted in partnership with Rockport Analytics, a research and analytical consulting firm.