Global spending on business travel is picking up the pace this year after falling short in 2016, according to the latest report by the Global Business Travel Association. The study calls for a 5.2% business travel spend growth in 2017.
With improvements in emerging markets and continued economic stimulus in the developed world, business travel activity is on the rise. As such, the report outlines that business travel spend around the world is expected to reach $1.7tn by 2021. Despite the increased usage of web conferencing tools, virtual meetings are not killing the handshake yet.
Record breaking business travel spend
The global economy shows signs of improvement. Consumers are spending, corporate profits are strong and commodity prices have stabilized. As a result, travel budgets are increasing. Taking into account these factors, business travel growth looks solid over the coming years. This year, business travel spend will reach record levels at over $1.3tn.
Expectations for future growth are optimistic with a forecasted compound annual growth rate (CAGR) of 6.5% over the next five years. Other studies extend this growth pace until 2027.
However, this positive forecast is pending a few question marks. Many downside risks remain, the report says. Growth expectations are clouded by unusually high global uncertainty. Security concerns, terrorism, geopolitical tensions, immigration crackdowns and trade policy changes could have a decidedly negative impact on business travel. In short, the world of business travel is a very strange place right now!
Top 15 countries for global business travel spend
Traditionally, the USA has been a country where commerce is heavily support by business travel. Conferences, salesmen on the road and business hotel bars are part of the American imaginary. Times are changing, though. US spend on business travel is expected to grow slower than average, letting China take first place as the top country for business travel spend.
At the end of 2015, China edged past the United States. In a demonstration of the global nature of today’s economy, China will top the rankings for business travel spend in the coming years thanks to a strong growth at 8.3%. The report predicts Chinese business travel spend will reach $474.5bn in 2021.
The Asia Pacific region is the largest business travel region in the world, contributing 42% of global business travel spend. Since 2000, the region has grown 7.6% annually, more than tripling in size. India and Indonesia remain two of the fastest growing business travel markets in the world, both with a CAGR of over 12.5% between 2017 and 2021.
In Europe, the fears of the UK leaving the European Union have not impacted business travel yet. The GBTA report expects UK to average nearly double-digit business travel spending growth over the next five years. Germany and France with larger than average growth.
Top ten industry sectors for global business travel spend
People who seek a career full of business travel opportunities should get a job in the food processing and services sector. It continues to lead the way with $114.4 bn spent on business travel every year. Despite being a mature industry, this sector will experience moderate to good growth of 5.6% CAGR over the next five years.
The social and personal services sector will see the highest growth rate over the next five years at 9.1% CAGR.