The Global Business Travel Association (“GBTA”), the world’s premier business travel and corporate meetings organisation, has released its latest GBTA BTI™ Outlook report on Brazil as part of its semiannual series. Sponsored by Visa, key highlights include:
* GBTA BTI™ indicates that strengthening domestic and global economies will place Brazil on a strong growth path in 2013, with the index increasing by over 40 points
* Brazilian total business travel spending is expected to grow 14.3% in 2013 to $34.5 billion
* Domestic business travel spending has grown 8.3% a year over the last 12 years, and is forecast to grow 12.9% to $27 billion in 2013
* International outbound travel spending is on target to expand by 20.2% in 2013, reaching $7.1 billion
* Demand for hotel rooms and air travel has been strengthening from both domestic and international outbound travelers; however there is an increasingly large gap in supply
Brazil currently ranks 8th in the business travel global rankings, and is on track to surpass Italy, France and the UK over the next two years
Wellington Costa, President of GBTA Brazil commented: “Brazil has shown remarkable economic resilience and we see this reflected in the latest GBTA business travel data. Although business travel spending slowed toward the end of 2012, growth rates for both travel spend and the economy are now rising again. The major challenge facing the Brazilian business travel market is whether the country’s travel infrastructure and supply can keep pace with its growing demand.”
“Brazil continues to be a bright spot globally when it comes to travel, with both domestic and international travel spending continuing to see strong growth,” said Diego Rodríguez, Head of Commercial Solutions, Visa Inc. Latin America and Caribbean. “According to the findings, Brazilian business travelers will surpass Italy, France and the UK over the next two years, as it continues rapid economic growth and development. With events such as the 2014 FIFA World Cup and the Rio 2016 Olympic Games helping fuel both business and tourism travel, Visa is committed to helping Brazil maximize their economic potential with electronic payment infrastructure.”
While it appears that the current economy is weighing on the minds of travelers, for the first half of this year, we saw U.S. and international travelers increasing their spend on Visa accounts,” said Tad Fordyce, head of global commercial solutions at Visa Inc. “From January to June of 2012, international travelers increased travel spend on their Visa accounts by nine percent in the U.S. to $20.1 billion. U.S. travelers were also active for the first six months, increasing travel spend on their Visa accounts by seven percent to $17 billion. 2012 has the ability to be the year of the traveler if we can continue this momentum of business and leisure travel.”
The path to growth
Despite the recessionary years of 2008 and 2009, Brazil’s business travel spending has continued to grow at an impressive rate, and has nearly tripled since 2000. From an estimated $11 billion in 2000 travel spend expanded at an average rate of 8% per year to over $30 billion in 2012.
In 2013 growth rates are expected to return to double digit figures, boosted by upward trends in key economic indicators – particularly business confidence and employment – both highly correlated with business travel spend. Business travel spending is forecast to increase by 14.3% to $34.5 billion in 2013. This growth momentum will continue, with total business travel spending forecast to grow another 16.1% to $40 billion in 2014.
Moving up the world rankings
Brazil’s business travel industry has been performing strongly compared to other developed markets. Brazil is currently ranked 8th in the world, up one place from 2011. With current growth rates, Brazil is forecast to continue its rise through the rankings as a major business travel market, overtaking Italy, France and the UK over the next two years.
The forecast for Brazil is positive; however there are challenges which must be addressed if the business travel market is to reach its full potential. The demand for hotel rooms and air travel has been strengthening from both domestic and international inbound travelers, and is set to increase over the next few years in the run-up to the World Cup and Olympics. The key challenge will be whether this demand can be met going forward. Currently the supply of hotel rooms and air travel remains constrained, and the manner in which this is addressed will impact the continued growth of the business travel market in Brazil.