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GBTA BTI™ Outlook – Annual Global Report & Forecast (Select Pages)

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Global business travel spending is expected to rise throughout 2013 and continue its ascent over the next several years, according to the latest installment of the GBTA BTI™ Outlook - Annual Global Report & Forecast, sponsored by Visa, Inc. Global spending on business travel is forecast to reach $1.12 trillion in 2013, a 5.4% increase from 2012, with travel spend stabilizing after a year rocked by worldwide economic and political uncertainty.


The full report is available for purchase for non-members and at no cost for GBTA members. To learn more about the Global Business Travel Association please visit www.gbta.org.

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GBTA BTI™ Outlook – Annual Global Report & Forecast (Select Pages)

  1. 1. Sponsored by: GBTA BTI™ Outlook – Annual Global Report & Forecast Prospects for Global Business Travel 2013-2017 August 2013
  2. 2. 7GBTA BTI™ Outlook – Annual Global Report & Forecast © 2013 GBTA Foundation. All Rights Reserved. GBTA BTI™ Outlook – Annual Global Report & Forecast Aug 2013 Executive Summary Highlight of Findings  2012 was a tough year for global business travel. The European Union came to the brink of collapse, the U.S. economic recovery failed to gain real momentum and China’s economy continued to downshift into a lower gear.  2013 brings about more certainty in our Outlook for global business travel. Since the turn of the millennium, spending on global business travel (BTS) has grown at an annual rate of 4.4% to a 2012 level of $1.06 trillion USD. BTS is projected to hit $1.12 trillion this year, 5.4% growth over 2012. We expect significantly better business travel performance as we enter the latter years of our forecast.  Last year was also a tough year for business travel predicitions. After essentially being spot on with our predictions for 2011 global business travel spending, we overestimated 2012 travel spend in most major markets (except the U.S.). Last year’s weaker than expected economic performance was the primary culprit. Our forecast for 2012 global business travel spending growth was high by just over 1%, with the top 15 markets ranging from 8% too high (Russia) to 2% low (U.S.).  The analogy of diminishing clouds with the sun beginning to break through seemed ideal to help describe current global economic conditions. There are clear signs of breaking sunshine in many parts of the world, the United States, Developing Asia, and Latin America providing examples. Yet challenges (clouds), mostly due to the fallout from adverse fiscal balances and debt overhang, remain.  Global GDP growth reached only 2.6% in 2012, down from 3% the year before and 4.3% in 2010. And many countries are reporting subpar growth in the first half of 2013. Total Business Travel Spending: Top 15 Markets - 2012 2012 Total BTS ($ Billions USD) Annual Growth in BTS (2012) 1. United States $262 4.4% 2. China $196 13.2% 3. Japan $65.2 -1.2% 4. Germany $50.5 1.1% 5. United Kingdom $40.2 0.1% 6. France $35.7 -2.1% 7. Italy $32.7 -7.5% 8. South Korea $30.5 2.8% 9. Brazil $30.1 9.3% 10. India $22.1 5.8% 11. Canada $22.0 1.4% 12. Australia $21.1 2.8% 13. Russia $20.4 2.6% 14. Spain $17.9 -8.0% 15. Netherlands $17.8 -4.5% World $1,061.2 3.4%
  3. 3. 41GBTA BTI™ Outlook – Annual Global Report & Forecast © 2013 GBTA Foundation. All Rights Reserved. GBTA BTI™ Outlook – Annual Global Report & Forecast Aug 2013 Asia Pacific The Asia Pacific region is the largest business travel region in the world, comprising 37% of global business travel. Business travel spend in Asia Pacific totaled $393 billion USD in 2012. Business travel spending in the Asia Pacific region has grown 8%, annually, since 2000, more than doubling in size. We expect that BTS in the region will grow at a 10% annual pace over the next five years. A full two-thirds of the business travel activity in the Asia Pacific region comes from China and Japan. China has been an economic juggernaut, growing at a double digit pace over the last decade. This has translated to significant growth in business travel spending – China has gone from $32 billion in BTS in 2000 to $196 billion in 2012, compound annual growth of 16.3%. China surpassed Japan to become the second largest business travel market in the world in 2006 and we now expect they will surpass the U.S. as the largest business travel market in the world by 2016 (two years later than we projected in last year’s Outlook). This shift comes in light of a continued slowdown in economic growth in China along with a U.S. business travel market that has fared better than expected, despite anemic economic growth. Japan remains the third largest business travel market in the world. Anemic economic growth has eroded some of Japan’s relevance but they are aggressively attempting to get back on track with more “normal” growth expectations. Current policies including monetary stimulus, fiscal spending and structural reform, spearheaded by Prime Minister Abe, are directed squarely at igniting Japan out of its Lost Decade. These policies should help spur business travel spending in the short run. We expect BTS in Japan to grow by 4% a year over the next five years, significantly faster than their average growth over the last 10 years. India is quickly becoming a major global business travel market. In 2012, India surpassed Canada to become the 10th largest market in the world, spending a total of $22.1 billion on business travel. Over the next five years, we expect India’s business travel spend will grow at a compound rate of 13.5%, making it one of the fastest growing markets in the world.

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