The GBTA Foundation, the research arm of the Global Business Travel Association, has released a comprehensive report analyzing the current state of global business travel spend and growth projections over the next five years.
The Global Business Travel Spending Outlook 2011-2015 study, sponsored by Visa, reveals that business travel spend around the world increased 8.4% in 2010, after falling 7.8% in 2009. Global spending on business travel is projected to grow another 9.2% in 2011 to just over $1 trillion.
According to the study the global economic recovery is occurring at two different speeds and that is reflected in the recovery of global business travel. Compound annual growth in business travel spending in Brazil, Russia, India and China is projected to grow two to three times faster than in developed economies like the U.S., France, Germany and the U.K.
“The recovery is happening, it’s just not happening as quickly as most people would like,” said Michael W. McCormick, GBTA executive director and COO. “Several countries are seeing the rebound happen at a much faster and more stable pace, and we’re seeing that in the pace of business travel spending in the economies of China, India, Russia and Brazil. We’re still bullish on business travel and all signs point towards continued growth.”
Global business travel has advanced faster and farther than expected a year ago. The industry has benefited by the combination of a number of positive factors that have allowed it to spring out of the recovery gate.
• First, corporate balance sheets and profits have been strong due, in part, to the stringent cost controls put in place during the “Great Recession.” In fact, a 2010 GBTA Foundation study (ROI Refresh: Travel as a Competitive Advantage) actually found that travel budget cuts were more aggressive (relative to sales) during the recession than sales losses would routinely dictate. This contributed to a release of pent-up demand once the recovery got underway.
• Second, the recovery in global trade growth dramatically boosted international business trips.
• Finally, travel inflation, particularly in air fares, is contributing to the rebound in travel spend.