The Global Business Travel Association (GBTA) has released key findings of its latest business travel index – the BTI Outlook, according to which business travel recovery in 2021 proceeded at a slower, more cautionary pace than expected from a year ago, 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.
The report provides a detailed analysis of business travel in 2021 with projections for 2022 and beyond, including post-pandemic recovery forecasts. Now in its 13th edition, the BTI Outlook is an exhaustive annual study of business travel spending and growth covering 73 countries across 44 industries. New first-time additions this year include survey insights from global senior financial executives as well as business travelers.
According to the forecast and analysis highlights from the latest BTI Outlook, global business travel activity has begun its rebound from the sharp downturn brought about by the COVID-19 pandemic. After declining 53.8 percent in 2020 to $661 billion, global expenditures are estimated to have rebounded 14 percent in 2021 to $754 billion. This was more slowly than forecast in GBTA’s previous BTI Outlook report issued in February of this year.
Despite recovery setbacks in 2021, a year-over-year surge of 38 percent is expected in 2022 as recovery and pent-up demand kicks into a higher gear, bringing global business travel spending back to over $1 trillion. Recovery will continue into 2023, with global spending rising 23 percent 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 percent, just below the 10-year average growth rate of 5.1 percent coming into 2020, ending the year at a forecasted $1.5 trillion.
However, persistent COVID-related threats and disruptions, supply-chain strains, labor shortages, increased costs, rising inflation and lagging recovery in Asian markets are just a few of the risks for continued on-target recovery. Moreover, the potential impacts of emerging factors including broad adoption of remote working models, long term cuts or elimination of business trips and travel volume, and the increased focus on sustainability practices and policies for business travel are yet to be determined.
Other results from GBTA’s BTI Outlook include analysis of 2021 challenges for the business travel industry besides the recovery outlook into 2025. According to the report, business travel faces 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 percent in 2021. Business travel markets in Latin America, the Middle East and Africa (MEA) and Asia-Pacific (APAC) all picked up 15 percent to 20 percent growth in 2021.
European markets have lagged in 2021. Emerging Europe is expected to gain only 10 percent and for the region of Western Europe, business travel expenditures for 2021 are expected to fall 3.8 percent from 2020 levels. This stems from early year underperformance, but with recent resurgence, business travel demand in the region is set to outpace most other parts of the world, barring any COVID-related setbacks.
Recovery in Asia Pacific has been slower, due to lagging border re-openings and a high dependence on international business travel. China’s expected growth was downgraded last year due to challenges posed by financial and other issues which could signal larger risks.
Business travel in Latin America is performing 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.
Business travel recovery will also vary by industry. While professional and business services and real estate have been resilient to date, wholesale trade has been challenged. Accommodation and food services, retail trade, arts, and entertainment and recreation, which were significantly impacted during the pandemic, are expected to recover sharply over the forecast period.
In a poll of 40 CFOs across North America, Latin America, Asia-Pacific and Europe, 70 percent felt in 2022 the overall economy in their country would be better or much better than in 2021. About half (52 percent) 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 felt the top return-on-investment reasons for business travel are sales and business development (68 percent), internal business planning and strategy (50 percent), client account management (48 percent), and employee training and development (48 percent).
The report also reveals that business travelers are ready and willing. Among 400 global business travelers polled, 86 percent report that they need travel to accomplish their business goals. A majority (81 percent) believe that their volume of domestic business travel will be greater or on par in 2022 than it was prior to the pandemic. More than half (54 percent) miss traveling and hope to travel more often in the future. However, 43 percent wouldn’t mind traveling less in the future, whether they indicated they miss it or not. Four in five (81 percent) of business travelers say their company requires vaccines for travel and in-person meetings.
The report outlines challenges to the pace of recovery. Global GDP growth is expected to reach 5.8 percent for 2021 and 4.2 percent in 2022. Should another wave of COVID materialize, China further decelerates, and/or an energy shortage intensify, more downward revisions may be necessary.
The BTI Outlook outlines four conditions necessary for full recovery in global business travel, which include global vaccination effort; national travel policy; business traveler sentiment and corporate travel management policy. The recovery remains chiefly dependent on the vaccine rollout, employees’ return to office, and a normalization of travel policies on 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.
The report was conducted in partnership with Rockport Analytics, a research and analytical consulting firm, and made possible by HRS.