GBTA (Global Business Travel Association)’s annual conference took place last week, attracting 3,500 attendees from more than 20 countries to Orlando after moving the date from August. The overarching mood was positive, based on the results of the latest Business Travel Index.
The GBTA BTI forecast for 2021-2025 (made possible by HRS) predicts that travel spending will surge in 2022, with a full recovery expected in 2024, when spending will return to 2019 pre-pandemic levels.
“Of any year we’ve issued the BTI Outlook forecast, this one was the most anticipated and it’s no surprise,” said CEO Suzanne Neufang. “There is optimism overall, as the industry, companies and travelers worldwide lean into recovery and the much-needed return to business travel.”
The Road to Recovery
The travel forecasts that were expected for 2021 were met with some bumps along the way such as COVID-19 surges, variant introductions, uneven vaccination rates and supply chain challenges.
According to GBTA, the road to business travel recovery will go into 2025. They reported that in 2021, after a 53.8 percent decline in 2020 to $661 billion, global spending rebound is forecasted at 14 percent or $754 billion. In 2022, a year-over-year surge of 38 percent is expected, and in 2023 the global spending forecast is expected to rise 23 percent year-over-year. A full recovery is expected by the end of 2024 at $1.48 trillion, just above the 2019 pre-pandemic spend of $1.4 trillion. And in 2025, global business travel growth will slow to 4.3 percent, ending the year at a forecasted $1.5 trillion.
“It’s not a straight line, and we need to be ready for what some of those variations are. Some of those variations are on a regional basis,” she pointed out.
The report breaks down the analysis by region, but some general information to keep in mind is that in 2021, North America is leading recovery for business travel with a rebound of 27 percent. Latin America, the Middle East and Africa, and Asia-Pacific are all up 15 to 20 percent domestically primarily. European markets have lagged a bit—Emerging Europe is expected to gain 10 percent, while Western Europe is expected to fall 3.8 percent from 2020. In addition, the recovery in Asia-Pacific has been slower than expected a year ago due to lagging border re-openings and the dependence of international business travel.
The BTI Outlook also indicated four conditions that are necessary for a full recovery in global business travel: the global vaccination effort; the national travel policy; business traveler sentiment; and corporate travel management policy. The recovery will remain dependent on the vaccine rollout, employees returning to the office, and a normalization of travel policies for both the national and corporate levels.
Sentiments Around Business Travel
After polling 400 business travelers, 86 percent reported that they need travel to accomplish their business goals. A majority, 81 percent, believe their volume of domestic business travel will be greater or equal to 2021 in 2022. However, 43 percent of those polled reported they wouldn’t mind traveling less in the future. And 81 percent of business travelers say their company requires vaccines for travel and in-person meetings.
In a poll of 40 CFOs, about 52 percent said they expect their company’s business travel spend to reach 2019 levels in 2022. And the CFOs said that business travel was important for their company for a variety of reasons: 68 percent indicated sales and business development as a top priority, 50 percent said internal business planning and strategy, 48 percent reported client account management, and another 48 percent said employee training and development.
Prices Expected to Rise
Global travel pricing across air, ground and hotels is expected to increase in the next two years. Increasing demand, capacity constraints and travelers’ sustainability demands, plus labor and fuel costs are all contributing to the travel price changes. In 2022, flight prices are expected to rise 3.3 percent, hotel rates 13 percent and ground transportation 3.9 percent. Recovery is not expected at the same pace across all categories or markets, according to GBTA’s BTI Outlook forecast.
This article first appeared on Recommend.com