Business Travel Market Metrics A Global Analysis of Business ...
1 CONFIDENTIAL FOR INTERNAL USE ONLY
Business Travel Market Metrics
A Global Analysis of Business Travel Activity
1 IHS Global Insight / National Business Travel Association / Egencia August 2009
Table of Contents
Introduction: How Big and Influential Is the Activity We Call Business Travel?.....................................................................2
Approach, Methodology, Data Sources, and Definitions ........................................................................................................4
Global Business Travel Analysis.............................................................................................................................................7
Business Travel's Contribution to Industries Around the Globe........................................................................................12
Global Business Travel Outlook........................................................................................................................................15
World Economic Outlook Summary .............................................................................................................................15
The Outlook for the Top 20 Global Travel Markets ......................................................................................................28
U.S Business Travel Market..................................................................................................................................................89
U.S. Business Travel Forecast..............................................................................................................................................96
U.S. Macroeconomic Outlook............................................................................................................................................96
Business Travel Overview.................................................................................................................................................98
Business Travel under alternative scenarios...................................................................................................................105
Business Travel with oil prices of $100 per barrel...........................................................................................................107
Business Travel Survey ......................................................................................................................................................109
The Economic Impact of U.S. Business Travel...................................................................................................................116
The Top Line: Total U.S. Business Travel Industry Spending .......................................................................................117
Economic Impact of the U.S. Business Travel industry ..................................................................................................118
Value added Impact of the U.S. Business Travel industry..............................................................................................119
Income Impact of the U.S. Business Travel industry ......................................................................................................120
Employment Impact of the U.S. Business Travel industry ..............................................................................................121
Tax Impact of the U.S. Business Travel industry ............................................................................................................123
U.S. Business Traveler Profile ............................................................................................................................................124
The Top Line: Person-Stayes and Spending .................................................................................................................125
Business Travel by Mode of Transportation....................................................................................................................127
Business Travel Spending Profile ...................................................................................................................................128
Business Travel Accommodations ..................................................................................................................................129
Who is the Typical Business Traveler? ...........................................................................................................................131
2 IHS Global Insight / National Business Travel Association / Egencia August 2009
Introduction: How Big and Influential Is the Activity We Call Business Travel?
Business travel is a term that encompasses many activities and purposes. It includes trips taken
on behalf of sales, operations management, educational advancement, social responsibility &
charitable works, and performance rewards. Moreover, the activity of business travel is viewed in
different ways by different actors. Travel suppliers see it as a significant source of revenue and
primary market segment. Corporate management sees it as both a principal business input and a
controllable expense. Travel Buyers and Managers view it as an optimization challenge. Policymakers (should) see it as
a generator of jobs, income, and tax revenue -albeit an underappreciated one. Finally, veteran business travelers view it
as an important part of their daily lives.
For all its definitions and purposes, the activity of business travel lacks a comprehensive and coherent description.
Clearly, information and metrics concerning business travel's size & growth, economic contribution, and traveler behavior
would benefit all of the actors mentioned above. Unfortunately, there is no definitive source for these metrics, one that
provides a comprehensive view of both the absolute and relative size of business travel activity.
The NBTA is the ideal organization to provide this critical foundation. Developing and distributing business travel
measures, examining issues, and detail emerging trends are all within the stated goals of the organization and are
consistent with member expectations.
To aid this effort, IHS Global Insight has developed measures of the current global market for business travel,
analyzed its historical trends, and created a projection through 2013. A separate and more detailed view of the
US business travel market was also provided. Next, the economic contribution or impact of business travel was
estimated for the U.S. Finally, a comprehensive profile of the US business traveler provides a detailed analysis
of travel incidence, spending, and behavior.
This report presents the results of our findings and the storylines behind them. IHS Global Insight has created a
report covering the all-important demand side of the business travel market. Metrics covering business travel volume, trip
behavior, spending, and costs have been combined with a complete profile of the U.S. business traveler. Clearly, supply
side measures (e.g. air & hotel revenue) are an important part of the process, but it is the development of comprehensive
measures of the demand side of business travel that make this research initiative unique.
The report also describes business travel's place in the global economy –what drives it, which sectors participate and at
what levels, and how it has changed over time. Importantly, the process by which these business travel measures have
been created can be refreshed on (at least) an annual basis so that ongoing monitoring of the business travel market is
possible. Consequently, this report can perhaps be envisioned as an "annual report on the state of global business
Travel managers, buyers, and suppliers will all benefit from the research findings. Informing marketing strategy, assisting
resource allocation and prioritization, and benchmarking travel programs/policies are all potential applications of this
research effort. Moreover, policymakers and citizens can both benefit from a better understanding of the size and
contribution that business travel makes to job creation, income generation, and tax receipts in the U.S.
Examples of highlights and implications include:
•Business travel is becoming more global. Travel managers should be increasingly thinking in terms of global
programs and policies.
•High-growth markets (such as China, India, and the Middle East) should be a key part of strategies going
3 IHS Global Insight / National Business Travel Association / Egencia August 2009
•The recession that began in earnest late in 2008 will make for a very difficult 2009. The global recovery will
begin late in 2009, however, and gather momentum in 2010 and 2011. Global business travel will decline by
nearly 15% in 2009, but the next two years will bring slow and steady improvement (+1% and +4%, respectively).
This is a good time to re-evaluate strategies, programs, and policies so that you are better positioned to take
advantage of the coming recovery.
•The rates of recovery from the current recession will vary in each country. Travel managers should leverage the
market-specific projections to better prioritize market activity and resource allocation during next 18 months
•There are substantial opportunities for travel management to address the 46% of business travel spend that is
outside of air, hotel, and rental cars.
•Industry sectors with high Travel-Spend-per-Sales-Dollar, such as real estate, government, utilities and
professional services, stand to save the most from managed travel activities.
•The productivity of business travel has grown dramatically over the past decade. More and better travel
management methods, technology alternatives and compliments, more dense and efficient trips, and slower
increases in travel costs (relative to wages and other inputs) are among the reasons.
•Although business travel is becoming more productive, it is still a significant portion of company spend. On
average in the U.S., business travel comprises about:
o 1 cent of every sales dollar
o 2.3 cents of each dollar of cost (including wages)
o 5 cents of each dollar of gross operating profit
•How much does business travel contribute to the U.S. economy? It is responsible for supporting over 4 million
U.S. jobs, generating $188 billion in wages, and $80 billion in federal, state, and local taxes. One in 30 U.S.
workers owes his/her job to business travel activity. If business travel were viewed as an industry, it would be the
largest in the country (Healthcare is #1). Policymakers should fully consider the repricussions of legislation or
regulation that hinders business travel activity.
• American business travelers are typically between the ages of 35 and 54 years old. They are married (76%),
and have no children living in their households (60%). They most likely work in a managerial or professional
position (35%) and make an average yearly income of $78,700.
•Business travelers will usually drive to their destinations (60%). The most common destinations are Los Angeles
(3.79%), New York (3.05%), San Francisco (2.77%), or Chicago (2.64%). The specific purpose of a business trip
is quite broad, but is typically transient business (62%) involving sales/purchasing (11%) or group business
involving seminars/training (15%). The business traveler will make a reservation (83%) to stay at a high-end or
mid-level hotel (28% and 31%) usually pays with a credit card (63%).
•A business traveler will spend an average of $465 during their stay, mostly on transportation (37%) and food
(20%). Their trip will usually lasts three days or less (87%) when they will leave to go home to Los Angeles
(5.3%), New York (3.9%), or Dallas-Fort Worth (2.4%). A typical business trip will average 343 miles one-way.
4 IHS Global Insight / National Business Travel Association / Egencia August 2009
Approach, Methodology, Data Sources, and Definitions
The overriding objective of this research initiative has been to create a process for developing
credible estimates of the size, growth, and contribution of business travel to companies,
industries, and countries around the world. Definitive and comprehensive measures simply do
not exist at this time. This process must obviously produce defensible results; ones that are
consistent with both the foundation data sources and any reputable aggregate or cross check
measures published by other recognized sources.
Once business travel measures have been generated, the intent is to return to this process periodically to monitor
changes over time. The key is to build a process that is both credible and repeatable, utilizing all appropriate data.
Updating the estimates of business travel activity requires re-executing this established process to reflect updates of the
integral data sources.
PRINCIPAL DATA SOURCES
Measuring the size, growth, and contribution of business travel is neither a simple or precise task. For one, data inputs
are relatively scarce, particularly outside the United States and certain Western European countries . Moreover, each
data source tends to tell only a portion of the business travel story. Detailed searches have uncovered no comprehensive
view of business travel volume or spending. Even in cases where travel metrics were available, they tended to cover
either total travel or leisure travel only.
Much of the supply-side data that we assembled during the research did not make the trip purpose distinction either. For
example, revenue and/or capacity metrics from, say, hotels or airlines generally do not distinguish a business traveler
from a leisure one -likewise, for rental cars and restaurants. This type of supply-side data provided many important sanity
checks but was insufficient to provide specific detailed insight that was additive towards a comprehensive view of
business travel activity.
The second most critical data sourcing problem was the inconsistency of definitions across sources. Promising datasets
that appeared to be ideal later proved to be less useful because of definitional inconsistencies surrounding industries,
geography, or what constituted business travel itself. Indeed, something as simple as a different definition of a business
trip sometimes thwarted attempts to use an otherwise robust data input. Obviously, the reconciliation of seemingly similar
sources was paramount in compiling our final estimates.
Our principal sources included:
D.K. Shifflet & Associates Travel Panel – TRAVEL PERFORMANCE/MonitorSM
A bespoke survey of financial management (CFOs & Controllers) at a representative sample of U.S. public and
private companies. Over 500 completed interviews captured information regarding travel & entertainment (T&E
spending, as well as the commitment to travel management programs, policies, and personnel.
The U.S. Bureau of Economic Analysis,
The U.S. Department of Commerce's Office of Travel & Tourism Industries
The US Department of Transportation
Smith Travel Research
United Nations/World Tourism Organization (UN/WTO)
5 IHS Global Insight / National Business Travel Association / Egencia August 2009
National Input/Output Accounts for 48 of the 72 countries analyzed in the study (source: typically Ministry of
Commerce or Statistics)
Various international government sources, including Ministries of Transportation, Tourism, and Commerce
IHS Global Insight's US and International data, modeling assets, and industry expertise.
METHODOLOGY & APPROACH
IHS Global Insight assembled an extensive data repository from which to build estimates of global business travel activity.
The inventory of sources included many of the private and public datasets that are commonly used to describe economic
and travel industry performance in many contexts. Moreover, a comprehensive literature search provided a list of related
research efforts that helped guide the final development of our methodology in each phase of the project. Each phase
began with an effort to understand and reconcile the differences between and among the pertinent data sources.
The development of our global database of business travel spending by country (72) and industry (48) required that we
build a "sources and uses" view of the industries that both buy and sell travel services. That is, IHS Global Insight put
together a four-dimensional sectoral matrix of travel suppliers/sellers (rows) and travel buyers (columns), the 3rd
dimensions being time (1998-2008) and country. The values within each cell describe the sales of a seller's services (e.g.
Hotels) to each buying industry (e.g. Utilities). For example, Airlines constitute one of the critical seller rows. Across the
Airline row, each one of the 48 buying industries total purchases of airline tickets is compiled.
The data used to populate the cells in this matrix came from the National Input/Output Accounts from 48 of the 72
countries covered in the study. Generally, this data is part of the National Income Accounting framework of each country,
typically managed by the Ministry of Commerce or Statistics. Because of effort and expense, most of the countries
perform the integral survey and compilation efforts necessary to build these matrixes on an infrequent (usually every 2-5
years) basis. IHS Global Insight's World Industry Group executes an ongoing proprietary process to estimate the values
of the matrix for the interim years. For the 24 countries that lacked published input/output matrices, IHS Global Insight
assigned a matrix from a country with a similar physical, location, and industrial make-up.
These seller-dominant matrixes were then transposed to produce estimates of the amount that each buying sector (e.g.
business services) purchases from each travel supply sectors (airlines, hotels, rental cars, restaurants, retail,
entertainment, etc.) as a percentage of that buying sector's total annual sales. Adding each supplier sector together, IHS
Global Insight created an overall business travel "purchase coefficient" for each buying sector. These purchase
coefficients were then tracked over the period 1998-2008.
The derivation of IHS Global Insight's initial estimates of business travel spending required that we apply the business
travel purchase matrixes to published levels of total sales for each (buying) sector in each country. The total sales
database is a key asset of IHS Global Insight's World Industry Service. The World Industry Service also routinely
forecasts total sales by sector and country, a critical component to our business travel spending projections.
The final estimates of business travel spending by country and sector required that IHS Global Insight fold in other data
inputs covering total travel volume and spending in each country, where available. Countries such as the US, UK,
Germany and others were compared and adjusted according to sources such as the UN/WTO, DK Shifflet & Associates,
WTTC, and IPK International. Moreover, the Ministries of Tourism for some of the countries provide estimates of overall
travel, sometimes separated into leisure and business purposes. Where available and definitionally consistent, these
were used as important cross-checks.
In the U.S. Economic Impact of Business Travel section of the study, IHS Global Insight turned to our repository of
economic models and data for assistance in translating the contribution of business travel spending to businesses,
households, and governments. The spending streams created by domestic and outbound international business trips
were traced through the US economy and their downstream economic contributions to job creation, income generation,
and tax receipts were derived. Our model repository included the IMPLAN model, developed at the University of
6 IHS Global Insight / National Business Travel Association / Egencia August 2009
Minnesota, and currently managed by the MIG Group. The IMPLAN model has fast become the defacto standard for U.S.
economic impact assessment among analysts, academia, and policy consultants. IHS Global Insight uses IMPLAN
extensively in its economic impact work on behalf of tourism destinations around the country.
The resulting global travel database, forecasts, and report created from this research effort can be used to inform many
strategic and tactical decisions. Users among the travel manager, buyer, and supplier community should, however, be
sure of what the estimates do and do not include, particularly when comparing the findings to other external or internal
measures. In fact, during initial presentations of the results, IHS Global Insight fielded a similar set of definitional
questions that we thought deserved mention in this report.
The first definition is that of business travel itself. Our objective was to be as comprehensive as possible resulting in the
inclusion of all kinds of business trips and trip spending, including:
Trips booked within and outside managed travel programs
Daytrips and overnight trips
Domestic and outbound international trips
Trips on behalf of sales, operations, training, convention/meeting, maintenance/repair, incentive, and customer
Trip spending includes all categories -air, hotel, rental car, other ground transportation, personal vehicles, food &
beverage, entertainment, and miscellaneous expenses.
Another important definitional note revolves around the use of U.S. dollars to represent business travel spending.
Comparison across countries required that local currencies be converted to US dollars using prevailing exchange rates
from IHS Global Insight's FOREX database. Moreover, all dollar values are expressed in current or nominal terms. This
means the effects of inflation are included in both the estimates of industry sales and business travel spending.
7 IHS Global Insight / National Business Travel Association / Egencia August 2009
Global Business Travel Analysis
One of the principal outcomes of this research effort is a credible, comprehensive, and repeatable
set of measures describing business travel activity –by industry, by country, by job function and
over time. Where feasible, metrics such as business trip volume and spending have been
consistently developed across market segments in order to arrive at a dataset that can be used
to support any number of strategic, tactical, and policy decisions.
The nature and detail of the business travel metrics contained in this report and its accompanying
database are largely dictated by available data from both secondary and primary sources. Supplier-based information
from airlines, hotels, and rental car companies has been reconciled with demand-side sources from governments, traveler
research panels, and travel management companies in an effort to create the most comprehensive view of business
This section of the report will present our finds regarding the size and growth of global business travel. We will first
summarize the global picture, with U.S. business travel being described in a separate section of the report. This section
will provide business travel measures for seventy-one (71) other countries around the world.
What factors determine the size and growth of business travel activity? There are eight distinguishing characteristics that
influence the level and rate of growth of business travel in our analysis:
Size of the economy –the level of business activity is paramount of course, as is its growth trajectory.
Land mass, population, and business dispersion of the country –larger countries with widely dispersed
populations require more travel to facilitate economic and business development
Industry mix of the economy –countries whose economies are dominated by sectors that are more travel-intense
will rise in the rankings
Productivity of business travel –business travel is a material/service input to virtually every industry. Whether
business travel's role in business success is rising or falling over time is a function of its factor productivity and the
availability of substitutes. In countries with well-developed network infrastructure, for example, high-quality video
conferencing alternatives can incrementally reduce the amount of business travel. On the other side, better
transportation infrastructure can reduce the cost of a trip, perhaps promoting more and/or longer trips.
Degree of export dominance –countries with large trade sectors (China, Germany, Japan, Indonesia) will tend to
engage in more international business travel. On a per-trip basis, spending will tend to be higher in these
economies. Trip volume will tend to be lower, however. In countries where economic activity is more dependent
upon consumption (U.S., India, U.K.), domestic business travel will dominate.
Physical location –proximity to markets and supply chain. Countries that are far from their markets will by
definition require more business travel to in order for businesses to succeed
Infrastructure development –this factor speaks to the ability to travel. Is the transportation and hospitality
infrastructure sufficient for business travel to flourish?
Environmental, tax, security, and regulatory policy –does the government help or hinder business travel? Policies
aimed at improving security, reducing fiscal deficits, or regulating land use -depending upon how they are
structured- can incrementally damage or promote business travel.
8 IHS Global Insight / National Business Travel Association / Egencia August 2009
IHS Global Insight estimates that total business travel spending across the globe reached $929 billion in 2008. This
represents growth of over 3% versus 2007, much of it coming from countries other than the United States. The definition
of business travel in this case includes both domestic and outbound international trips.
North America, Western Europe, and Asia dominate global business travel activity, with each representing about 30% of
total in 2008. Asia, Emerging Europe, and Middle East & Africa have led the way with respect to the rate of growth since
The lion's share of this nearly $900+ billion
dollars does take place within the U.S.,
however. At $261 billion, the U.S. comprises
about 28% of all business travel. Given its size
and torrid growth, China is the second largest
business travel market at $93.8 billion in 2008.
Growth around the world has been anything but
uniform. While the U.S. dominates in terms of
spending levels, growth has been more robust
in Asia, Latin America, the Middle East, and
Eastern Europe. This is largely a reflection of
rapid economic growth in these regions, as well
as the tendency for business travel to be used
more intensively in earlier stages of
company/industry development. Many of these
counties also lack the infrastructure sufficient to
promote non-travel alternatives to business
9 IHS Global Insight / National Business Travel Association / Egencia August 2009
Western Europe, North America (NAFTA), and Asia-Pacific are all about the same size with respect to the level of
business travel spending in 2008. Together, they account for nearly 90% of global activity. The remaining 10% takes
place in Latin America, Emerging Europe, and the Middle East & Africa (MEA). Growth in business travel spending over
the past decade paints a slightly different picture. North America and Western Europe have been the growth laggards,
while Asia, Emerging Europe, and MEA have led the way. IHS Global Insight estimates that worldwide business travel
spending activity has increased by over 35% since 1998. Some of this growth is due to inflation (all estimates are in
current US dollars), but most represents real increases in the volume and dispersion of business travel activity around the
Among the top 25 markets, Russia has been the fastest growing over the past decade (1998-2008), registering
compound annual growth of about 16% per year. This is more than eight times the rate of U.S. growth (1.9%) during that
same period. Indonesia (15%) and China (14%) also registered double digit growth per year over that period. Turkey
(9.2%), India (8.8%) and South Korea (8.4%) are also notable in terms of business travel spending expansion.
Meanwhile, World growth in business travel spending (measured in nominal dollars) over the last decade achieved 4.6%
While many countries grew more quickly than
the U.S, all started from a much smaller base.
China, the number two business travel market,
is only about 1/3 the size of the U.S. at
present. Japan, at $78 billion in 2008, is the
third largest market, yet only 30% as large as
the U.S. Italy floats to the top of the rankings
on the strength of its export and domestic
economic performance over the past decade.
Moreover, Italy's current industrial mix favors
industry's that are relatively more travel
The market with the fastest rate of growth
during the last decade was Zimbabwe, at 35%
per year. This performance is impressive, but
total business travel spending in that country
was only $3.2 billion in 2008.
Another way to analyze growth is to focus upon
the change in the level of business travel
spending between 1998 and 2008. In the U.S.,
for example, annual business travel spending
was $44 billion higher in 2008 than it was in
1998. China expanded by nearly $70 billion
and Russia grew by only $15 billion during the
same period. Zimbabwe grew to $3.2 billion from virtually zero during the past decade.
10 IHS Global Insight / National Business Travel Association / Egencia August 2009
The top 25 business travel markets are shown in the table below, along with their 1998-2008 growth performance.
TOP 25 GLOBALBUSINESS TRAVEL MARKETS
Based on Domestic and Outbound International (in millions of current U.S. $$)
IHS Global Insight also examined business travel spending by industry around the world. The table below identifies the
largest and most travel-dependent sectors. The level and growth of business travel spending is contrasted with organic
global industry sales. Sector growth in business travel spending is dependent upon both the organic growth of the
industry as well as the intensity and productivity of travel as a critical input.
11 IHS Global Insight / National Business Travel Association / Egencia August 2009
TOP 20 GLOBAL BUSINESS TRAVEL SECTORS:
2008 Business Travel Spending $$
The Utilities, Food Processing & Services, Real Estate, and Government sectors float to the top of the rankings primarily
due to their sheer size across the globe. Utilities, Food Processing, and Real Estate do engage in significant business
travel in relative terms as well. For example, Utilities have a very large service & repair component at both the retail and
generation levels, ones that require significant investments in business travel. Many employees of these organizations
travel almost every day.
Virtually every country has a well-established presence in these basic sectors. For many developing economies, these
sectors are the primary benefactors of critical infrastructure investment. With the exception of Utilities, their usage of
business travel per dollar of industry sales or per industry employee is generally not as large as, say, the Banking &
Financial sector or Professional & Business services, yet the size of these industries, as demonstrated in the column
entitled, "Industry Sales 2008", adds up to significant levels of business travel spending.
Turning to subject of growth in business travel spending over the last decade, Oil Refining, Education, Chemicals, and
Social & Personal Services lead the list. In part due to organic growth around the world, in part due to rapid economic
expansion in developing countries, and in part due to increasing usage of business travel, these industries have led the
Note that the Top 25 sectors account for nearly 92% of all global business travel. The remaining industries are either
relatively small (e.g. Textile Manufacturing), less intense users of business travel (e.g. Mining, Retail Trade), or both (e.g.
Apparel, Wood Products). The last column in the table counts the dollar increase in business travel spending over the
decade 1998 to 2008. Here again, the larger business travel sectors tend to dominate the list. Business travel spending
in the Food Processing & Services had a relatively sluggish growth rate over the decade, but its size and global dispersion
12 IHS Global Insight / National Business Travel Association / Egencia August 2009
make it the 5th largest industry for increasing the level of business travel spending, roughly adding $1.8 billion per year
TOP 25 GLOBAL BUSINESS TRAVEL SECTORS:
Ranked on 2008 Business Travel Spending $$
BUSINESS TRAVEL'S CONTRIBUTION TO INDUSTRIES AROUND THE GLOBE
One of the most important conceptual and numeric building blocks of this research effort is the estimations of the
contribution of business travel spending to top-line revenues of industries. This metric essentially captures each industry's
travel intensity. The need for business travel as a material/service input varies across both industries and countries. An
understanding of the level of business travel spending per dollar of revenue puts the need for business travel in
perspective relative to both sales and other critical inputs such as labor costs, other materials and services expenses,
even equipment and structures investment.
The global business travel database that has been built in support of this research effort includes metrics for both industry
performance (sales by sector) and business travel utilization for each country. The level of business travel spend per
dollar of revenue is also an essential data concept. We have not only worked to derive a current value for this key
measure, but have also sought to track its change over time. Increases or decreases over the past decade essentially
address changes in the "productivity" of business travel in the production recipe of each industry sector.
13 IHS Global Insight / National Business Travel Association / Egencia August 2009
As mentioned, our key measure of business travel intensity varies across industries and countries. For any one sector,
the degree of business travel required to support a measured level of revenue is a function of the unique operating
framework of that sector, as well as the physical, regulatory, and cultural attributes of each country.
The chart shows the distribution of travel-spend-per-revenue dollar across the 72 countries examined in the study for the
sector, Professional & Business Services. We chose this industry as an example because it is anecdotally understood to
be among the most travel-intense of the 48 sectors included in our research. With a global average of 1.1¢ per dollar of
revenue, the chart shows the dispersion of the 72 countries around the global average. It should be noted that for some
of the countries, IHS Global Insight was unable to find a defensible source for this critical metric. Generally, they were
smaller or developing countries (e.g. Bangladesh, Jordan, Costa Rica, etc.) that lack detailed economic and business data
of all kinds. In those cases, we imposed the global average –hence the many countries that appear on the global average
Note the above-average travel intensity of some of the Western European countries, registering in the 1.5¢-1.6¢ per
revenue dollar range. This is a significant difference over some of the developing countries such as Mexico or the
Ukraine, showing rates in the half-cent per revenue dollar range. Western Europe boasts a large and well-developed
Professional & Business Services sector that must engage in a great deal of business travel in order to support its
relatively large level of sector revenue. The opposite is true of countries such as Mexico or Greece, where the industry is
in an earlier stage of development.
Next, we take a deeper dive into a specific country showing the differences in travel intensity across domestic industries.
Using the United Kingdom as an example, many of the key sectors have been highlighted in the bar chart. Measures of
business travel intensity range from a high of 3.7¢ per revenue dollar for Equipment Leasing to a low of Mining with
fractions of a penny per revenue dollar. The U.K. all-industry average is about 0.9¢ per revenue dollar.
Source: IHS Global Insight, OECD, UN/WTO, various Ministries of Commerce, Statistics, & Tourism
14 IHS Global Insight / National Business Travel Association / Egencia August 2009
Keep in mind that this metric is not an indicator of the size of business travel spending. Rubber & Plastics, for example,
may show relatively high travel intensity, but the industry is a small player in the U.K. economy. The opposite is true of
sectors such as Education or Government.
Keeping with the U.K. example, we can also illustrate the notion of travel intensity over time. As previously mentioned,
upward or downward trends in travel spend-per-revenue-dollar speak to the changing productivity of business travel as a
key production input. Examining the change in business travel's intensity in the Professional & Business Services
industry, we note that travel intensity is trending down over the last decade. Travel is becoming a smaller portion of the
industry's total cost. Said
differently, business travel's
productivity is on the rise.
There are many possible reasons
for the increase in travel
A reduction in travel
prices relative to the
price of other inputs and
A rise in the length of
stay of business trips,
where business travelers
are seeing more sales
more meetings, or
Source: HIS Global Insight, OECD, UN/WTO
15 IHS Global Insight / National Business Travel Association / Egencia August 2009
attending more training sessions per trip.
Increased usage of business travel alternatives such as conference calls, Webcasts, and video conferencing.
Improvements in both the usage and quality of travel management. Through cost reductions and productivity
improvements, travel management has added to the efficiency and contribution made by business travel.
A gradual change in the structure of the industry where, for example, companies begin to locate closer to their
markets and/or supply chains.
IHS Global Insight has forecasted future changes in travel intensity for each industry. Using a combination of a number of
secular and cyclical factors, we have generally continued the trends observed over the past decade across industries and
countries. This was an important building block for the business travel spending projections presented in the next section.
GLOBAL BUSINESS TRAVEL OUTLOOK
The next section will cover the IHS Global Insight forecast for global business travel. Our view of the medium-term future
of travel (2009-2013) is driven primarily by two fundamental factors: (1) our expectations for global macroeconomic
performance and (2) the underlying contribution that business travel makes to each industry in each country. To establish
our macroeconomic expectations through 2013, we have turned to IHS Global Insight's Country Intelligence Group's data,
economic models, and country experts. This unit of IHS Global Insight monitors economic activity in over 200 countries
and provides clients with daily analysis, ongoing risk assessments, and monthly forecasts.
Our view of the contribution of business travel to each country-sector combination has been established by analyzing
trends in the business travel "purchasing" behavior of 48 sectors across 72 countries. Analyzing trends in the level of
business travel spending per dollar of industry sales (or per employee) over time, IHS Global Insight was able to extend
these factors out to 2013. The combination of the forecast of industry sales (macroeconomic environment) and the trend
in business travel spending per dollar of sales (business travel intensity & productivity) was used to generate our
We begin with a summary explanation of the global macroeconomic environment covering the current recession, the
coming recovery, and growth prospects through 2013.
World Economic Outlook Summary
The global economy ran into a brick wall at the end of 2008.
The advanced economies' strong downshift during 2008 has set
up the global economy for its worst recession since World War II.
The world economy's expansion has been going through a rough
patch since mid-2007, when the lagged cumulative effect of
monetary tightening around the world during the preceding
several years finally dented the global housing boom, triggering a
growing credit tightening and then outright crunch in advanced
economies. World GDP growth has decelerated markedly, from a
robust annualized growth rate of 4.7% in the second quarter of
2007 to a dismal contraction of 0.1% in the third quarter of
2008—which already was far below the global economy's long-
term annual trend rate of 3.4%. Moreover, we estimate world
GDP contracted 6.0% in the fourth quarter and expect a further major contraction of similar magnitude in the first quarter
of 2009. Economic conditions have deteriorated severely since mid-September because of an intensification of financial
market turbulence and an unprecedented credit crunch in the global banking system. Although the sharp retreat of oil and
16 IHS Global Insight / National Business Travel Association / Egencia August 2009
other primary commodities prices since last July is providing timely relief for both consumers and businesses, the price
levels are likely to remain elevated compared with their long-term historical averages.
Moreover, the odds are that the global economy will continue to face major headwinds for some months as a result of the
declines in global property markets and the tightening of lending standards by beleaguered financial institutions.
International trade is no longer supporting world growth. Until recently, international trade had been a key pillar of
support for the global economy in general and raw-material-exporting economies and countries with undervalued
currencies in particular. With nearly two-thirds of the world economy now in the midst of a major contraction, though,
foreign trade has now become a drag for the global growth. IHS Global Insight expects world nominal merchandise
exports to contract more than 23% in 2009. World trade could stabilize before the end of this year, but it is unlikely to
make a full recovery to its normal pace of double global GDP growth before 2011.
The worst of the downturn is behind us. The global economy's recession, which intensified at an alarming pace in
September 2008, has been moderating since March and appears to be nearing its end. Recent data releases are no
longer as depressing as they were earlier this year, and there are increasing signs for at least a modest recovery during
the second half of this year. Financial-market indicators, in particular, have been showing increasing signs of stabilisation
for several months as credit conditions have started to loosen up and corporate bond spreads have narrowed, which are
providing badly needed financial relief for beleaguered businesses.
Our latest bottom-up global economic forecast-which was started in late May and published in mid-June-resulted in a
world GDP growth projection of -2.6% for 2009, which represents the world economy's most severe annual contraction
in more than 60 years. To be sure, the world economy is still in a highly fragile state, with most investors still avoiding
risky assets and market consensus anticipating a "great recession" for 2009. The downturn has been particularly acute in
the case of industries, as aggregate global output is projected to decline by more than 10% during 2009. Latest national-
account reports confirm that world GDP growth declined sharply for the second consecutive quarter in the first quarter of
Nevertheless, recent high-frequency data releases suggest that the rate of contraction has diminished in the
second quarter, and there is now a good chance that we may see a modest rise in global GDP in the third quarter. The
economies of Greater China and the United States are likely to lead the recovery among emerging markets and advanced
economies, respectively, because of their diverse base, dynamic structure, and more flexible and competitive markets
relative to their peers.
Given the unsettled condition of global credit markets, the world economy's deleveraging is likely to continue
through late 2009. The severity of the financial market turmoil has already devastated the U.S. investment banking
sector, severely depressed asset prices worldwide, and caught policymakers flatfooted. The global credit system has
become highly dysfunctional. The entire subprime mortgage market remains effectively shut down, and more broadly, the
structured credit markets are still in seizure. The volume of both outstanding asset-backed commercial paper and
leveraged buy-out activity has fallen off dramatically. The number of initial public offerings (IPOs) has collapsed to near
zero since the second quarter. Financial firms, which have been forced to write down trillions of dollars in bad debt since
the second quarter of 2007, are finding it increasingly difficult to raise capital—in part because of the sharp drop in their
share prices during the past two years and in part because their credit ratings have nosedived sharply. The strain on the
financial system has engulfed the corporate sector, as reflected in rising corporate bond spreads, particularly in the high-
World growth will not get above trend until the advanced economies' housing markets stabilize. The advanced
economies are now in a very fragile state, as they have been dragged down by a protracted housing downturn and
deleveraging in financial markets. Because of the huge share of these countries in the global economy, world quarterly
GDP growth is now in the midst of a major contraction. IHS Global Insight now expects the downturn to engulf all
economies, including emerging markets and less-developed countries, given their dependence on exporting to advanced
17 IHS Global Insight / National Business Travel Association / Egencia August 2009
Weak growth will keep financial markets volatile. The global financial system has already seen its capital base
damaged by the U.S.-led housing and mortgage crisis, and the credibility of its institutions has come under question as a
result of inadequate transparency and imprudent investment decisions. The deteriorating global economic outlook and
uncertainties on the extent of damage to financial institutions' balance sheets will keep lending activity subdued, risky
assets out of favor, and investors skittish for at least the next several months. The resulting deleveraging and
disintermediation have already depressed global economic activity.
High oil prices represent another major risk for the global economy's growth prospects. During the past seven
years, periodic spikes in global oil prices sapped economic recovery by dampening consumer confidence and
discouraging businesses from adopting aggressive expansion plans. High oil prices were particularly harmful to energy-
intensive sectors, such as transportation and some industrial-material-processing industries. The responsibility of oil
prices for the global economy's momentum losses should not be exaggerated, though. Although oil prices undoubtedly
shaved several tenths of a percentage point from the global economy's aggregate growth since 2004, their impact was far
less severe compared with previous oil crises—particularly those of the 1970s and 1980s. Indeed, rising oil prices had
relatively modest adverse effects on overall inflation during the last business cycle because of the global economy's lower
oil intensity and lingering output gaps in many sectors, which greatly diminished the impact of high oil prices on core
inflation. We take a specific look at the impact of oil prices on business travel in the U.S. Business Travel Forecast
section of this report.
With oil prices having retreated by more than 60% during the second half of 2008, central banks have had substantial
latitude for easing their monetary policies as much as they want. Nevertheless, some financial-market analysts continue to
believe that oil remains in a long-term bull market and expect global crude prices to resume their upward
The advanced economies' inflation upsurge is over. High oil and raw-material prices led to spikes in headline inflation
throughout the world during 2007 and the first half of 2008, but core inflation rates remained relatively low, particularly
among advanced economies and dynamic Asian economies. In any case, since mid-2008, the ongoing world growth
deceleration, along with powerful deflationary pressures from the housing downturn, has weakened labor markets;
constrained unit labor cost growth, and exerted downward pressure on the prices of housing and energy and other
industrial raw materials. These developments have contained inflationary pressures and eased concerns about
macroeconomic imbalances, as reflected in recent downward revisions to the inflation forecasts in surveys published by
The good news is that real interest rates remain low, and monetary authorities have ample room for easing. The
advanced economies' low core inflation rates suggest that monetary policy could heavily err on the accommodative side
even if energy and raw material prices resumed their upward march over the coming months. By reducing the households'
discretionary spending, any upward relative price shock from food, energy, or other industrial raw materials has a
deflationary (rather than inflationary) effect on domestic demand. As a result, we do not expect any monetary tightening
by major central banks before 2010.
As a result, global growth should rebound in 2010. Despite its current weakness, we expect the world economy to
stabilize during the second half of 2009, thanks to the advanced economies' reflationary measures, and shift to a higher
gear by mid-2010. Nevertheless, given the protracted nature of housing-market adjustments, world growth will likely be
less robust over the next several quarters than during the past five years of the current business cycle.
Indeed, the anticipated global recovery could turn out to be unsustainable. Growth may falter again in 2010 or 2011,
as many of the problems afflicting credit markets are deep rooted. Financial markets could remain vulnerable to periodic
bouts of intense volatility and disruptive risk re-pricing. It may take additional, extraordinary policy action by policymakers,
such as costly government bailouts of financial institutions and quantitative monetary easing, to get us out of the current
rut and prevent a prolonged crisis.
A longer-than-anticipated housing downturn is now the global economy's worst nightmare. With housing assets
extremely overvalued in many countries, the current housing-market adjustments could turn out to be a very protracted
18 IHS Global Insight / National Business Travel Association / Egencia August 2009
process. A synchronous worldwide housing crash has the potential to unleash powerful global deflationary pressures for
several years. With a growing list of countries already mired in housing-market downturns of various degrees of severity,
financial markets are likely to remain at risk of further turmoil and disorderly price correction. If the housing-market
downturn intensifies and spreads to other countries, we could be facing an escalating debt-asset deflation, the likes of
which has not been experienced since the 1930s.
Global business profit and investment growth, which has decelerated intensely in line with nominal world GDP,
will start to recover in the second half of 2009. The financial firms' profits will likely rebound first, from their current
horrendous state, thanks to the central banks' rapid "steepening" of the yield curve. Non-financial firms' profit levels will
also rebound soon after, as their drastic retrenchments reduce their costs, nominal global GDP stops contracting, and
world aggregate demand begins to improve.
Bottom Line: The global economy is in the midst of a potentially dangerous crisis that may linger on beyond 2010
and has the potential to get a lot worse before it gets better. Furthermore, the anticipated recovery that is likely to
start in 2010 may prove disappointing given that the primary source of the ongoing weakness is a deep and protracted
correction in housing markets. Housing market downturns tend to be long-lasting processes that can go on for 5 to 10
years. With most banks continuing to tighten their lending standards for businesses as well as consumers, financial
markets will remain jittery and vulnerable to periodic bouts of intense volatility and disruptive risk re-pricing. The
stabilization of financial markets may require even more aggressive monetary easing and liquidity injections than we have
seen so far—such as government takeovers of many more financial institutions (or their "toxic" debts). Indeed, given the
severity of the distortions in asset markets as a result of the past several years' easy credit, the complete normalization of
credit markets could take several years.
World Economy Annual Aggregate Forecast Numbers
(Percent change from a year earlier, unless otherwise specified)
2006 2007 2008 2009 2010
Real GDP 4.1 4.0 2.2 -2.6 1.9
Nominal Per-Capita GDP (U.S. Dollars) 7,495 8,331 9,071 8,359 8,753
Industrial Production 4.3 4.0 -0.3 -10.1 3.5
Merchandise Exports (Bil. of U.S. Dollars) 11,600 13,432 15,481 11,452 12,277
Merchandise Imports (Bil. of U.S. Dollars) 11,475 13,205 15,183 12,073 12,879
Merchandise Exports (Share of World GDP) 23.9 24.6 25.7 20.4 20.7
Real Retail Sales 2.8 2.6 0.3 -2.2 1.8
Consumer Price Index 3.1 3.3 5.0 1.5 2.2
Wholesale Price Index 4.6 4.1 8.6 -4.6 1.4
Money Supply, M1, Year-end 6.9 6.9 4.6 10.8 4.6
Broad Money Supply, Year-end 9.0 10.2 9.7 6.2 6.7
Policy Interest Rate (Percent) 4.9 4.9 3.2 2.2 2.5
Short-Term Interest Rate (Percent) 4.9 5.4 5.0 3.3 3.1
Long-Term Interest Rate (Percent) 4.7 5.0 4.8 4.3 4.3
Fiscal Balance (Share of GDP) -0.9 -0.4 -2.0 -6.9 -5.9
19 IHS Global Insight / National Business Travel Association / Egencia August 2009
20 IHS Global Insight / National Business Travel Association / Egencia August 2009
GDP Growth for Key Regions
(Annual compound growth rate, percent)
1998–2002 2003–2007 2008–2012
World 2.8 3.5 2.0
United States 2.6 2.5 1.6
Canada 3.5 2.4 2.0
Western Europe 2.2 2.1 0.2
European Union 2.3 2.3 0.3
Eurozone 2.1 2.0 0.1
United Kingdom 3.0 2.3 0.7
Asia-Pacific 3.5 5.0 3.9
Japan 0.9 1.6 0.4
Rest of Region 5.9 7.3 5.8
Australia 3.4 3.1 2.4
China 8.7 10.8 8.6
India 5.7 8.5 7.0
South Korea 6.3 4.2 2.4
Commonwealth of Ind. States 6.8 7.5 1.4
Central Europe & the Balkans 2.8 5.6 1.6
Latin America & the Caribbean 0.7 3.1 1.3
Middle East & North Africa 3.6 6.2 3.5
Sub-Saharan Africa 3.3 5.6 3.2
Implications for Global Business Travel
In step with the rest of the global economy, the business travel market is expected to recover from the "Great Recession"
beginning in late 2009. The recovery will be sluggish at best during the early phase of the economic rebound, with more
rapid expansion not arriving until 2010 and 2011. The U.S. and China are expected to lead the way in economic
recovery, as well as business travel spending expansion. The rest of the world will follow this lead later in 2010 and into
21 IHS Global Insight / National Business Travel Association / Egencia August 2009
As mentioned earlier in the Global Business Travel
Analysis section, the U.S. and the rest of the world
are on dramatically different growth trajectories. The
same will be true for the next five years as well. In
part of reflection of the relative growth performance
of the economies of the U.S. versus, say, China or
India, but also due to the very slow pace of American
companies' willingness to lift business travel
restrictions. This will be driven by anemic
improvements in corporate profit performance, where
most of the early improvement will come from cost
reductions rather than top line improvement.
The emerging growth picture for the U.S. is quite
different than much of the rest of the world.
Business travel spending in the U.S. will recover very
slowly from the current recession. With a relatively
weak outlook for both the top and bottom lines of
corporate profit and loss statements, companies will
be reluctant to add employees, purchase equipment,
and relax cost containment measures.
This is perhaps even truer of Western Europe, where deeper and longer-lasting housing and credit market problems paint
a rather dim picture for business travel recovery. Moreover, the traditional European market is much more mature leaving
less opportunity for quick gains. Meanwhile, emerging economies have the advantage of brighter long-term economic
growth prospects. Many did not have a housing bubble to contend with, nor the need for massive deleveraging of
consumer and business credit markets. Countries such as China, Brazil, and India were also able to implement
significant stimulus packages to buoy their economies through the current recession. These packages, most with large
infrastructure investment components, will help their economies recover more quickly as this global recession comes to
an end beginning in late 2009.
The net is for a continuation of the trend of U.S.
and Western European business travel spending
growing more slowly than the rest of the world. At
$262 billion in 2008, the U.S. market is estimated
to grow to only $266 billion by 2013, a
compounded growth rate of only 0.3% per year.
The World, on the other hand, will expand from
$929 billion in 2008 to $986 billion five years later.
This represents growth of 1.2% per year.
Consequently, the U.S. share of total business
travel spending will fall from 28% in 2008 to 27%
While virtually every country will participate in what
IHS Global Insight calls "The Great Recession",
some will fair better than others. Such was the case during the peak years of the last expansion period as well. In
business travel spending, countries such as China, Russia, India and the United Kingdom all outpaced the U.S. on an
annual growth basis. Indeed, many of these countries were not significantly impacted by the 2001 recession. Yet, each
experienced a dramatic curtailment in business travel growth beginning as early as mid 2007. During 2008, the United
Source: IHS Global Insight, NBTA
22 IHS Global Insight / National Business Travel Association / Egencia August 2009
States had already experienced a decline in business travel well in advance of the rapid decay in many of the key
economic indicators –largely a fourth quarter phenomena. By early 2009, every significant business travel market was
experiencing year-over-year declines.
The rather dramatic "V" shaped recession depicted below assumes a market bottom in late 2009. It will be 2010, even
2011 for some countries, before growth rates turn positive, however. Said differently, key business travel markets will
recover from the "Great Recession", but the global recovery will be more tepid. Repairing the damage done to global
housing and credit markets will take time. Still, the good news is that the Great Recession will end and growth markets
Growth in Business Travel Spending
includes Domestic and Outbound International Trips
Source: IHS Global Insight, NBTA, OECD, UN/WTO, Various Ministries of Commerce & Tourism
23 IHS Global Insight / National Business Travel Association / Egencia August 2009
GLOBAL BUSINESS TRAVEL SPENDING GROWTH:
2008-2013 Change in Business Travel Spending $$ Through 2013
(in billions of current U.S.$)
Depending upon the definition of business travel growth through 2013, the world picture looks quite different. Basing the
definition on the increase in the level of business travel spending (above), North America and Asia are the dominant
regions. Changing the perspective to the rate of growth (below) suggests a different spatial view of the globe. Latin
America, Eastern Europe, Asia, and the Middle East appear more favorable.
GLOBAL BUSINESS TRAVEL SPENDING GROWTH:
2008-2013 COMPOUND ANNUAL GROWTH RATE IN %
24 IHS Global Insight / National Business Travel Association / Egencia August 2009
TOP 15 & BOTTOM 15 GLOBAL BUSINESS TRAVEL GROWTH MARKETS:
Ranked on Change in Business Travel Spending $$ Through 2013
(all figures in millions of current U.S.$ unless otherwise noted)
China leads the way in business travel spending growth through 2013. The combination of torrid economic
growth and the sheer size of its business travel market push China to the top of the list. China's significant economic
stimulus measures implemented early on in the current global recession are already bearing fruit. Infrastructure
investment and consumption support were key platforms of the stimulus. Both will lead to greater business travel,
particularly domestic trips, as their economy recovers.
Source: HIS Global Insight, NBTA, OECD, UN/TWO, various Ministries of Commerce & Tourism
25 IHS Global Insight / National Business Travel Association / Egencia August 2009
The U.S. comes in at #4 on the business travel dollar growth rankings, based upon size and a relatively early
start at economic recovery. The recovery will begin as soon as the second half of 2009, yet will be slow by past
standards. Expected to grow a relatively slow rate (0.3% per year) through 2013, the U.S. will still add more than $4.2
billion in business travel spending.
India, like China, is expected to return to its earlier position as a global growth leader. India's economy is less
dependent on export markets than China. Government stimulus efforts in India also focused on domestic demand
support. This will lead to more growth in domestic business travel activity in the short-to-medium term.
Japan will show surprising business travel resilience as their economy awakens from a long sleep.
Improvements in domestic business activity and eventual recovery in export markets will drive more business travel.
Japan's business travel market is already large and is expected in increase over 3.3% per year through 2013.
Korea, Indonesia, Malaysia, Hong Kong, and Taiwan will rebound quickly as global export markets begin to
thaw. Recovery in their international and, in some cases, domestic business travel markets will quickly follow suit.
The size of their existing business travel markets coupled with expectations for a return to above-trend economic
growth places them all on the Top 15 list.
Emerging European markets, likewise, will shake off the current recession and begin to recover in 2010.
Commodity market improvements, as well as export recovery, will get business travel spending growth back on track.
Markets such as the Czech Republic, Romania, and Hungary are already large enough to make some noise on the
country business travel hit parade. Economic growth expectations guarantee that they will continue to rise.
Iran makes the Top 15 list based upon its size and growth over the past decade. Domestic business travel is
already significant in this market, and international outbound has expanded despite longstanding economic sanctions.
Still, Iran's political situation is a significant risk. Instability could erase business travel gains almost overnight,
particularly if the situation boils over.
A less robust and somewhat delayed economic recovery in much of Western Europe push many of its
business travel markets into the Bottom 15 list, at least through 2013. The housing crisis in the U.K., Spain, and
Ireland, among others, is much worse than in the U.S. and, unfortunately, still has a long way to go. Moreover, the
banking and financial crisis is actually more acute and potentially damaging in Western Europe. Finally, longer-term
systemic issues such as an aging population, labor market problems, and lower investment spending will continue to
hamper growth in business travel spending in this part of the world.
Germany and Italy make the Bottom 15 list primarily due to export dependence and sluggish domestic
demand. Both countries have significant domestic business travel markets, particularly relative to the rest of Western
Europe. Both countries are expected to be relatively late in the sequence of economic recovery and, as a result,
show a loss in business travel spending through 2013.
Russia's dependence upon commodity exports, particularly oil and natural gas, puts it at the bottom of the
list through 2013. It will recover from the current recession, but it will be among the last countries to commence its
rebound. Domestic and international business travel will begin to grow again, but too late to spare Russia the dubious
distinction of being at the bottom of the 2008-2013 list.
Transposing our view of business travel markets, IHS Global Insight can also evaluate the prospects for travel spending
across global industry sectors. From the vantage point of industries, the pace of recovery from the current recession is
very much a function of which countries dominate the sector and the amount to which economic stimulus package funds
flow to that sector. For example, infrastructure investment in China, India, and the U.S. will propel sectors such as
Government, Construction, Utilities, and Education to the top of the list. On the other hand, continuing problems in the
global Banking & Financial sectors prevent it from making the Top 20.
26 IHS Global Insight / National Business Travel Association / Egencia August 2009
TOP 20 GLOBAL GROWTH SECTORS THROUGH 2013:
Ranked on Change in Business Travel Spending $$ Through 2013
From a business travel spending perspective, Government is clearly participating in the current recession.
Because of its key role in leading many countries out of of recession, Government business travel growth in 2010 will
be among the highest. Likewise, for Education. Taken over the five-year period 2009-2013, Government (federal and
local) will show the largest level increase in business travel spending.
Sectors such as Utilities, Food Processing & Services, and Education make the list for two key reasons. First,
they exist in virtually every country and have a scale correlated with the size/growth of population. Secondly, recovery
from the global recession will be led by these industries. Government stimulus money has poured into infrastructure
development, propelling these sectors out of the recovery gate sooner.
Notable industries missing from this list include Banking & Finance and Profession & Business Services.
While these sectors are relatively travel-intense, the depth of their declines and the slower pace of their expected
recoveries keep them just below the cutoff of the Top 20 list. Business travel spending for these industries, as well as
for Wholesale Trade, will grow during this recovery, just not enough to break into the Top 20. In the case of Banking
& Finance, despite average annual growth of 1.6% per year through 2013, the magnitude of the decline during this
recession unfortunately prevents a return to the previous peak.
The prospects and rankings for many of these sectors changes dramatically as one moves from country to country. To
illustrate this point, the next section takes each of the Top 20 business travel country markets and dives deeper into the
issue of industry-by-industry performance over the next five years.
Source: IHS Global Insight, NBTA, OECD, various Ministries of Commerce, Statistics, & Tourism
27 IHS Global Insight / National Business Travel Association / Egencia August 2009
Which sectors represent the best targets? From a purely external perspective, the short answer is those that are:
(1) organically growing their own lines of business at home and abroad,
(2) are already business travel-intense, and
(3) are expected to grow that intensity over the next few years.
Once way to depict the distribution of sectors across these key criterion is to use a "dogs-and-stars" scatter plot.
Dispersing the industries across business travel spending size (2008) and growth (2008-2013 CAGR%) suggests their
relative position and potential attractiveness as a target market.
All of the sectors falling in the "Stars" quadrant are already notably large spenders on business travel. They are also
expected to grow that spending over the next five years. We have already mentioned Utilities and Construction, but other
sectors such as Communications Services, Transportation Services, and Chemicals also deserve consideration. Motor
Vehicles is perhaps the most notable "Lower Priority" quadrant. For one, this industry is not a large user of business
travel. Moreover, its global market challenges are already well-known. Notable sectors in the "Emerging" quadrant
include Computer Manufacturing, Instrumentation, and Industrial Machinery.
Banking & Finance, Business Services, and Wholesale Trade find themselves in the "Mature" quadrant. We already know
them to be very travel-intense. The challenge lies in their ability (and pace) to recover from the current recession and
grow business travel through 2013.
Global Business Travel Target Markets 2008-2013
Food Processing and Services
Professional & Business
Transportation ServicesWholesale Trade
Construction Communications ServicesBanking & Finance
Equipment Rental & Leasing
Agriculture, Hunting, Forestry,
Rubber & Plastic Manufacturing
Non-Metallic Mineral Products
Hotels & Restaurants
Fabricated Metal Products Paper & Paper Products
Chemicals & Chemical
ProductsPrinting & Publishing
Computer Service & Related
Electrical Machinery &
ApparatusTextiles Industrial Machinery &
EquipmentBasic Metals Manufacturing
Wood & Wood ProductsOther Manufacturing
Motor Vehicles Medical, Precision & Optical
Office, Accounting & Computing
Leather & Leather Products$1,000
-4.0% -2.0% 0.0% 2.0% 4.0% 6.0%
2008-2013 Growth (CAGR%) in Business Travel Spending
28 IHS Global Insight / National Business Travel Association / Egencia August 2009
The Outlook for the Top 20 Global Travel Markets
The next section of the report presents the results of IHS Global Insight's business travel spending analysis and
projections for the top twenty (20) global markets. For each of these 20 countries, we have presented a snapshot of the
business travel market through the inclusion of:
1. A brief overview of the macroeconomic environment provided by IHS Global Insight's Country Intelligence Group,
2. A chart showing the history of total business travel spending in that country, as well as our projection through
3. A table illustrating our estimates of business travel spending by industry within that country, and
4. A table ranking business travel market opportunities by industry. The table takes a "dogs-and-stars" view of both
the current size of business travel in the industry and its growth prospects through 2013. The most desirable
opportunities are those with large current levels of business travel spending and good prospects for future growth.
The industries are allocated to the following four categories of market opportunity based upon their dispersion
around the means of both business travel measures:
Low Priority –those industries with either low levels of business travel, lower growth expectations, or both
Mature –industries with relatively large levels of current business travel spending, but have less robust
future growth prospects are classified as more mature.
Emerging –industries with excellent growth prospects, but relatively smaller current levels of business
travel spending are placed in this category.
Stars –these are industries with both large current levels of business travel spending and relatively strong
prospects for future growth.
Chart and table sources are (unless otherwise noted) from IHS Global Insight, NBTA, OECD, UN/WTO, and country-
specific Ministries of Commerce, Statistics, and Tourism
29 IHS Global Insight / National Business Travel Association / Egencia August 2009
Inventories, investment, and consumer spending all continue to decline. IHS Global Insight subsequently expects
the economy will experience a contraction of around 0.6% in 2009 as the lagged, full impact of the downturn
unfurls from the second quarter onwards.
In anticipation of a potential economic slowdown, authorities have dramatically loosened monetary and fiscal
policy. Spending programs include direct cash disbursals for low- and middle-income households for employment
generation and support for first-time buyers in the real estate market.
Australian banks are marked for their high levels of capitalization and more conservative lending practices.
Nevertheless, rapidly rising unemployment and growing income insecurity could offset the positive impact of
BUSINESS TRAVEL SPENDING, AUSTRALIA
(Millions of US$)
98 99 00 01 02 03 04 05 06 07 08E 09F 10F 11F 12F 13F
31 IHS Global Insight / National Business Travel Association / Egencia August 2009
BUSINESS TRAVEL WINNERS AND LOSERS
(2008, mn US$)
Real Estate $1,602.6 1.8% Star
Transportation Services $1,241.6 -0.1% Star
Government $934.3 1.9% Star
Social & Personal Services $903.9 0.6% Star
Communications Services $771.1 0.4% Star
Education $288.8 8.1% Emerging
Hotels & Restaurants $227.9 0.1% Emerging
Rubber & Plastic Manufacturing $224.0 1.7% Emerging
Paper & Paper Products $171.0 0.6% Emerging
Wood & Wood Products $138.0 -0.3% Emerging
Transportation Equipment $88.9 0.6% Emerging
Electrical Machinery & Apparatus $66.5 0.0% Emerging
Industrial Machinery & Equipment $52.7 2.6% Emerging
Medical, Precision & Optical Instruments $32.0 2.1% Emerging
Mining $22.2 1.7% Emerging
Leather & Leather Products $2.7 -0.3% Emerging
Private Households Employees $0.0 11.3% Emerging
Utilities $1,507.6 -0.6% Mature
Professional & Business Services $1,333.7 -3.0% Mature
Food Processing and Services $1,278.4 -1.0% Mature
Construction $945.5 -1.1% Mature
Banking & Finance $872.6 -3.5% Mature
Wholesale Trade $816.7 -2.7% Mature
Equipment Rental & Leasing $715.5 -2.3% Mature
Agriculture, Hunting, Forestry, Fishing $547.9 -0.6% Mature
Research & Development Services $530.4 -3.1% Mature
Fabricated Metal Products $369.7 -3.4% Low Priority
Non-Metallic Mineral Products $336.5 -3.1% Low Priority
Printing & Publishing $274.9 -3.7% Low Priority
Retail Trade $206.8 -1.2% Low Priority
Petroleum Refining $204.4 -1.1% Low Priority
Computer Service & Related Activities $199.2 -2.4% Low Priority
Basic Metals Manufacturing $130.7 -4.7% Low Priority
Other Manufacturing $117.9 -2.3% Low Priority
Chemicals & Chemical Products $98.3 -1.3% Low Priority
Communication Equipment $63.5 -1.2% Low Priority
Textiles $55.8 -0.7% Low Priority
Motor Vehicles $48.1 -1.6% Low Priority
Apparel $13.4 -0.8% Low Priority
Recycling $12.2 -5.1% Low Priority
Health & Social Work $6.1 -3.7% Low Priority
Office, Accounting & Computing Machinery $3.1 -1.7% Low Priority
Total $17,456.9 -0.7% Mature
32 IHS Global Insight / National Business Travel Association / Egencia August 2009
Economic growth will become sharply negative in 2009 and take long to recover due to persisting global financial-
market turbulences triggered by the U.S. subprime crisis, substantial euro appreciation, and weakened consumer
Inflation will be very soft in coming months and is expected to rise to 1.1% in 2010. As domestic demand
continues to suffer from rising unemployment, the debate will rather shift toward deflation risks—although IHS
Global Insight still regards such fears as overblown.
Political uncertainty will remain elevated after the collapse and resurrection of the grand coalition government and
the strengthening of the far right in the September 2008 polls.
BUSINESS TRAVEL SPENDING, AUSTRIA
(Millions of US$)
98 99 00 01 02 03 04 05 06 07 08E 09F 10F 11F 12F 13F
34 IHS Global Insight / National Business Travel Association / Egencia August 2009
BUSINESS TRAVEL WINNERS AND LOSERS
(2008, mn US$)
Professional & Business Services $680.2 -3.2% Star
Real Estate $629.9 0.7% Star
Food Processing and Services $577.6 -0.2% Star
Social & Personal Services $507.0 -0.1% Star
Construction $389.8 -1.3% Star
Equipment Rental & Leasing $350.7 -2.2% Star
Government $344.5 0.8% Star
Banking & Finance $276.0 -3.5% Star
Communications Services $246.1 0.1% Star
Fabricated Metal Products $239.7 -1.9% Star
Rubber & Plastic Manufacturing $233.1 2.4% Star
Non-Metallic Mineral Products $229.6 -3.1% Star
Hotels & Restaurants $218.5 -0.4% Emerging
Paper & Paper Products $211.9 1.7% Emerging
Agriculture, Hunting, Forestry, Fishing $138.6 -2.3% Emerging
Industrial Machinery & Equipment $133.1 4.0% Emerging
Electrical Machinery & Apparatus $110.4 3.0% Emerging
Printing & Publishing $101.0 -3.1% Emerging
Petroleum Refining $97.7 -1.6% Emerging
Computer Service & Related Activities $96.2 -3.1% Emerging
Other Manufacturing $92.7 -1.7% Emerging
Retail Trade $92.2 -1.3% Emerging
Education $87.0 7.7% Emerging
Communication Equipment $80.6 -1.2% Emerging
Basic Metals Manufacturing $73.5 -1.9% Emerging
Chemicals & Chemical Products $65.7 0.2% Emerging
Textiles $50.4 -1.3% Emerging
Motor Vehicles $45.1 -0.6% Emerging
Medical, Precision & Optical Instruments $40.1 3.9% Emerging
Research & Development Services $11.5 -3.6% Emerging
Recycling $10.0 -1.8% Emerging
Apparel $6.2 -1.6% Emerging
Leather & Leather Products $6.0 -0.5% Emerging
Health & Social Work $1.8 -3.7% Emerging
Mining $0.7 1.6% Emerging
Office, Accounting & Computing Machinery $0.7 -3.8% Emerging
Private Households Employees $0.0 10.1% Emerging
Utilities $1,459.5 -30.2% Mature
Transportation Services $660.5 -41.5% Mature
Wholesale Trade $508.4 -46.0% Mature
Wood & Wood Products $208.8 -52.9% Low Priority
Transportation Equipment $57.1 -64.1% Low Priority
Total $9,370.3 -0.4% Star
35 IHS Global Insight / National Business Travel Association / Egencia August 2009
Belgian GDP is projected to contract 3.3% in 2009 after growing 1.0% in 2008 which is largely due to a
deteriorating export market critical to the country’s overall economic performance.
The current financial market crisis and very tight lending conditions will restrict consumer spending in the
near term. In addition, the labor market is being hit by the current global economic downturn, and we expect
employment to decline in 2009.
Fiscal policy will continue to be restricted by the country’s high levels of public debt. We expect the Belgian
government budget to slip into negative territory in 2009–10, following six years of persistently balanced budgets.
BUSINESS TRAVEL SPENDING, BELGIUM
(Millions of US$)
98 99 00 01 02 03 04 05 06 07 08E 09F 10F 11F 12F 13F
37 IHS Global Insight / National Business Travel Association / Egencia August 2009
BUSINESS TRAVEL WINNERS AND LOSERS
(2008, mn US$)
Food Processing and Services $1,233.4 0.3% Star
Real Estate $714.9 0.7% Star
Construction $585.6 0.3% Star
Social & Personal Services $531.3 0.3% Star
Government $526.7 1.2% Star
Rubber & Plastic Manufacturing $320.7 2.2% Emerging
Hotels & Restaurants $157.2 -0.2% Emerging
Paper & Paper Products $154.5 0.9% Emerging
Education $134.5 7.9% Emerging
Wood & Wood Products $92.8 -0.2% Emerging
Electrical Machinery & Apparatus $92.4 1.9% Emerging
Industrial Machinery & Equipment $91.0 3.9% Emerging
Motor Vehicles $69.5 -0.3% Emerging
Transportation Equipment $42.9 3.1% Emerging
Medical, Precision & Optical Instruments $36.7 3.7% Emerging
Leather & Leather Products $3.5 1.9% Emerging
Mining $0.6 3.7% Emerging
Private Households Employees $0.0 11.1% Emerging
Professional & Business Services $1,828.8 -2.4% Mature
Transportation Services $1,263.9 -1.0% Mature
Petroleum Refining $982.0 -1.5% Mature
Wholesale Trade $919.7 -2.6% Mature
Utilities $831.5 -1.4% Mature
Banking & Finance $455.0 -3.3% Mature
Equipment Rental & Leasing $386.6 -1.9% Mature
Communications Services $357.5 -0.8% Mature
Non-Metallic Mineral Products $313.6 -2.6% Low Priority
Fabricated Metal Products $278.2 -2.8% Low Priority
Chemicals & Chemical Products $270.8 -0.6% Low Priority
Retail Trade $161.5 -1.2% Low Priority
Textiles $152.0 -0.7% Low Priority
Computer Service & Related Activities $143.9 -3.1% Low Priority
Basic Metals Manufacturing $142.8 -3.3% Low Priority
Printing & Publishing $137.9 -4.0% Low Priority
Agriculture, Hunting, Forestry, Fishing $111.2 -1.7% Low Priority
Other Manufacturing $76.9 -3.8% Low Priority
Recycling $56.5 -4.0% Low Priority
Communication Equipment $47.0 -2.9% Low Priority
Research & Development Services $43.9 -2.9% Low Priority
Apparel $12.4 -1.6% Low Priority
Health & Social Work $3.0 -4.2% Low Priority
Office, Accounting & Computing Machinery $1.3 -1.9% Low Priority
Total $13,766.1 -0.9% Mature
38 IHS Global Insight / National Business Travel Association / Egencia August 2009
Brazil will come out of the recession earlier than most countries in the developed world helped by domestic
demand, strong fiscal stimulus, expansionary monetary policy, and credit availability.
The central bank will continue to take measures to avoid a liquidity crisis by guaranteeing the availability of credit
for banks and corporations. We expect commodity prices to show high volatility, although revolving around current
A trade surplus is anticipated for the foreseeable future even though exports are expected to drop 21% and
imports contract 18% thus keeping the trade balance in positive territory at around US$15 billion.
BUSINESS TRAVEL SPENDING, BRAZIL
(Millions of US$)
98 99 00 01 02 03 04 05 06 07 08E 09F 10F 11F 12F 13F
40 IHS Global Insight / National Business Travel Association / Egencia August 2009
BUSINESS TRAVEL WINNERS AND LOSERS
(2008, mn US$)
Food Processing and Services $2,755.0 -3.0% Star
Utilities $2,643.4 -2.3% Star
Government $1,400.8 -0.7% Star
Transportation Services $1,143.4 -1.9% Star
Communications Services $1,098.3 -1.1% Star
Agriculture, Hunting, Forestry, Fishing $1,054.8 -2.6% Star
Petroleum Refining $860.1 -3.4% Star
Real Estate $818.5 -0.4% Star
Social & Personal Services $643.2 -1.2% Star
Construction $636.7 -3.8% Star
Banking & Finance $609.5 -4.4% Star
Rubber & Plastic Manufacturing $592.1 -1.8% Star
Paper & Paper Products $487.7 -0.8% Star
Equipment Rental & Leasing $379.9 -3.6% Emerging
Chemicals & Chemical Products $357.8 -3.3% Emerging
Hotels & Restaurants $222.6 -1.5% Emerging
Industrial Machinery & Equipment $202.8 -0.6% Emerging
Education $202.2 7.3% Emerging
Transportation Equipment $201.1 -2.3% Emerging
Textiles $187.5 -3.6% Emerging
Electrical Machinery & Apparatus $165.4 -0.7% Emerging
Retail Trade $158.2 -2.5% Emerging
Computer Service & Related Activities $107.8 -4.1% Emerging
Apparel $52.0 -4.1% Emerging
Leather & Leather Products $50.6 -4.4% Emerging
Medical, Precision & Optical Instruments $47.3 -0.9% Emerging
Mining $14.6 1.2% Emerging
Private Households Employees $0.0 8.8% Emerging
Professional & Business Services $719.5 -4.7% Mature
Non-Metallic Mineral Products $535.2 -5.0% Mature
Wholesale Trade $516.8 -4.7% Mature
Research & Development Services $285.6 -5.5% Low Priority
Fabricated Metal Products $185.4 -5.4% Low Priority
Printing & Publishing $165.8 -5.6% Low Priority
Motor Vehicles $163.1 -5.0% Low Priority
Basic Metals Manufacturing $153.5 -8.7% Low Priority
Communication Equipment $145.9 -6.2% Low Priority
Other Manufacturing $116.6 -6.6% Low Priority
Wood & Wood Products $103.6 -66.3% Low Priority
Recycling $25.9 -7.7% Low Priority
Office, Accounting & Computing Machinery $17.3 -8.6% Low Priority
Health & Social Work $2.3 -5.4% Low Priority
Total $20,230.0 -2.5% Star
41 IHS Global Insight / National Business Travel Association / Egencia August 2009
Growth is falling sharply and with poor outlook for the second quarter, IHS Global Insight forecasts a 2.3%
contraction in 2009.
Inflation has been abating in Canada over the past few months because of the weakening economy but is
expected to rebound closer to the Bank of Canada's 2% target in 2010. We expect this downward pressure on
prices to persist throughout the year, as the economy contracts through mid-year and excess supply increases as
the output gap widens.
The Canadian dollar has steadily drifted up with commodity prices remaining a key factor. The Canadian dollar's
current slow advance is due in large part to the climb in the price of oil, as well as the recent increase in natural
gas prices. As oil prices recover from their current lows, the dollar is likely to appreciate.
BUSINESS TRAVEL SPENDING, CANADA
(Millions of US$)
98 99 00 01 02 03 04 05 06 07 08E 09F 10F 11F 12F 13F