International business travel spending from the UK, Germany and France is expected to drop this year, but will make a recovery in 2013, according to latest forecasts from the Global Business Travel Association (GBTA).
The inaugural annual Business Travel Index Outlook - Western Europe economic analysis, revealed that overall spending in the three major economies of the UK, Germany and France would be almost flat in 2012.
Forecast levels of 2012 BTS in Germany, UK and France all exhibit growth in domestic travel, but declines in international outbound spending (“IOB”).
Meanwhile growth levels in 2013 BTS in Germany, the UK and France will be much stronger with both domestic BTS and IOB showing increases.
Southern European countries, Spain and Italy are expected to experience even steeper declines in BTS due to slower economic growth rates and austerity measures. 2012 is forecast to see declines of 4.1% and 5.0% for Spain and Italy, respectively.
Overall, the European economic situation will weigh heavily on countries’ economic growth levels. In 2012, GDP in Germany, France and the UK are forecast to grow by 0.5%, 0.6% and 0.7% respectively. This will be due more to the indirect impact of Southern Europe rather than domestic weaknesses
Michael McCormick, GBTA executive director and chief operating officer said: “We found that economic growth across Europe will be constrained in 2012 with weakness in the first half giving way to improving prospects later in the year.
“Increasing economic growth in Germany, France and the UK will be offset by declines in many Southern European economies. Business travel is a leading indicator of the economy, so we"re expecting a challenging scenario over the next year.”
Paul Tilstone, Managing Director of GBTA Europe, commented: “As for business travel; all five of the countries in the report are relatively mature and together form nearly 70% of Europe’s business travel market. As such, the results are highly indicative of the Continent’s overall performance. Forecasts for 2013 are very positive but 2012 shows a significant disconnect between Northern and Southern economies and domestic and international business travel spend.”