GBTA Prospects for the Business Travel Industry
The Global Business Travel Association, GBTA, publishes the Annual Global Report & Forecast every August, an outlook study focused on the next five years for the international business travel industry. The report covers business travel market forecasts based on analysis of global economic trends, the business environment, issues in the world’s travel industry, and a country-by-country study of business travel spending. The highlights of the report are as follows:
Business travel spending in 2018 grew to $1,410 billion (KRW1,700 trillion), a 5.7% increase compared to the previous year. Business travel spending rose 5.8% and 5.7% in 2017 and 2018, respectively. Such high growth of over 5% can be attributed to the economic recovery of major emerging markets, lower unemployment rates, and the continued policy of low-interest rates. However, the growth rate of business travel spending is now expected to fall to 3.1%, the weakest since the financial crisis in 2009. This forecast is a result of a global economic headwind that has gained force since the second half of 2018 and reflects the economic uncertainty that has extended since 2012 and has not yet entirely cleared.
Global trade policy direction has proven to be the biggest wild card, influencing the prospect of international business travel. The year 2018 saw protectionism drive, an increase in tariffed items and tariff rates as well as a US-China trade war. Consequently, global trade waned, businesses shrunk, and corporate incentive trips in 2019 decreased, painting a gloomy picture for the global business travel industry.
[Graph] Global Business Travel Spending Growth : Trend & Forecast (2008 – 2023)
Global business travel spending is predicted to increase to just $1.8 trillion (KRW2,133 trillion) in 2023. The forecast reflects downward adjustments of expected growth rates of major business travel markets facing these global economy headwinds.
Out of the top 20 business travel spenders, only five countries are forecast to be above the average growth rate of 4.8%. The remaining 15 countries are predicted to record growth rates from 2% to 4.5%. India, Indonesia, China, Sweden, and the UK are the five countries expected to outperform the average (4.8%). India and Indonesia alone are likely to increase business travel spending by more than 5% but they too are not free from the impact of potential recession arising from trade conflicts. A drop in export orders and a continued decrease in industrial production growth may also push down all global business travel market projections.
For Korea, in 2018, business travelers spent $38 billion (KRW45.3 trillion), 5.5% more than the previous year. This growth rate is lower than the 7.9% increase recorded in 2017. The Korean business travel industry is forecast to slow down in the next five years, maintaining an average annual growth rate of 2.7%. Growth will mainly be in the health and public sectors, administration and support service areas, education, and professional science and technology sectors, where the growth rate is predicted to be between 5% and 9%.
[Ref] 2019 GBTA Annual Global Report&Forecast