GBTA’s annual Business Travel Index has pegged 2025 as the year global business travel volume would surpass its $1.4 trillion peak from 2019, after being felled by the Covid-19 pandemic in 2020, which the study estimates reduced global business volume by 51.5 percent versus the prior year. That’s 10 times worse than business travel losses that followed 9/11 or the Great Recession in 2008. GBTA partnered with Rockport Analytics to produce the report.
GBTA research director Chris Ely said 2021 will continue to be “a year of survival” for the business travel industry, but recovery toward the back half of the year should deliver a significant boost. The study projected 21 percent growth in global business travel volumes in 2021, followed by roughly 38 percent growth in 2022, which would catapult global business travel spend back to $1.2 trillion, but still shy of full recovery.
“That’s huge growth again,” said Ely about the 2022 projection. “Business travel is a key component of the economy, so as businesses are looking to dig themselves out and pursue new clients, that’s when business travel kicks in.”
The study predicted businesses would prioritize sales travel during the early recovery period in 2021, followed by service and repair travel to existing customers. Internal meetings, according to the research, would be prioritized over external conferences, events and trade shows, while travel for employee training and supplier meetings would be less important, especially given virtual alternatives.
Ely underscored that “busines travel is a key component of the economy,” but it won’t be the first mover in recovery. “Governments are pumping money into their economies,” he said. That type of stimulus combined with effective vaccine distribution and inoculation programs must happen first, according to the study, and the markets that master those elements will recover business travel volumes faster. The report pointed to China and other Asia-Pacific markets as models.
Despite the challenges, GBTA interim executive director Dave Hilfman said he was optimistic about a full industry recovery. “We’ve seen domestic travel in China recover almost completely. We can have similar results as we make our way through this year,” he said.
International travel, Hilfman acknowledged, would take longer. “We need vaccines and standard covid testing to help open borders. I like to be action oriented, but right now we have to have patience as vaccines roll out and we start to get control of the virus.”
The GBTA report analyzed global markets by eight factors to guide projections through 2024: the size of the economy; land mass, population and business dispersion; industry mix; technology and productivity of business travel; export dominance; physical location; infrastructure; environmental, tax, security and health regulatory policy. Per global region, the study projected the following:
Comparatively, Asia-Pacific saw less business travel decline in 2020 than most other regions, dropping 44 percent versus 60 percent declines in North America and 58 percent declines in Western Europe. Researchers also noted the region will see quicker recovery. China’s early infections, followed by strong lockdowns, precipitated a comparatively speedy recovery from Covid infection rates in the second quarter. The study estimated 2020 business travel in China to decline by 38 percent, buoyed by the country’s historically strong domestic demand, which was largely recovered by the fourth quarter. “The hardest hit markets in the region will include those that are dependent on international business travel like Singapore which is set to decline by 82 percent in 2020,” researchers wrote. “Business travel in Hong Kong, likewise, will plummet by 84 percent in 2020.”
Western Europe: Researchers projected busines travel for Western Europe to fall 58 percent from 2019 level of $335 billion. The region was hard hit by the pandemic and continues to struggle with new virus variants as well as disputes regarding vaccine distribution, which have emerged in the past week. Another factor weighing on business travel spending in Western Europe is “the dependence of many companies and countries on intra-regional travel and economic activity. The dizzying array of country restrictions and policies from the outset of the pandemic made it very difficult for travelers to follow,” wrote the researchers. Though not cited in the report, Brexit has introduced more complexities for business travel to and from the United Kingdom, including documentation requirements that may stymie business travel that would otherwise have recovered quickly.
Emerging Europe: Research authors separated Europe into two segments. ‘Emerging Europe,’ which includes countries like Romania, Russia, Poland, Turkey and Ukraine, saw business travel decline by 48 percent in 2020 to $29.7 billion, recovering back to its 2019 peak of $57.2 billion by 2024.
Business travel volumes in Latin America were already struggling going into the pandemic, declining to $50 billion in 2019. Political crisis in Venezuela and ongoing recessions in Argentina and Ecuador compounded with early emergence of Covid-19 in Brazil in February 2020 to weaken business travel performance in the region. However, strong domestic business travel as well fewer travel restrictions in the region, overall, saved some business trips. Volume fell 45 percent compared to 51.5 percent globally. Researchers predicted similar drivers would help the region recover business travel volume at an average 1.4 percent growth rate annually through 2024, slightly faster than the forecasted -0.4 percent global pace.
Middle East & Africa
The Middle East & Africa had strong business travel growth numbers going into 2020. The region experienced 7 percent growth in 2018. An additional 2.6 percent growth in 2019 put total business travel spend for the region at $27 million. According to the GBTA report, 2020 business travel declines in the region were less severe than other markets, driven largely by lower Covid-19 case rates compared to North America and Europe. Researchers also cited less discretionary business travel—i.e. the business travel that was taking place was directly tied to business operations. Given those factors, researchers expected the MEA region to recover at an average annual 4.3 percent between 2019 to 2024, outperforming all other regions. Recent reports of highly contagious Covid-19 variants in South Africa, a major business travel market for the region, could hinder that recovery pace.
According to the GBTA report, business travel spending in North America hit nearly $347 billion in 2019, with the United States accounting for more than 90 percent of that spend. The U.S., however, was hard hit by the pandemic and cases and hospitalizations continued to rise going into 2021. Tense international trade relations, especially with China, had already hindered business travel growth in that market. Researchers predicted North American business travel would experience the steepest declines in the world in 2020, and particularly the U.S., where the report estimated a 61 percent drop for 2020. Canada, researchers said, would see business travel fall 51 percent and Mexico a comparatively modest 44 percent decline. The report called out the roll of government and the administration change in the U.S. as a catalyst for business travel recovery there, citing the likelihood of the Biden administration “to lead much more liberal trade and immigration policies” and hopes for a cohesive public safety strategy that would include a “coordinated vaccine campaign across the U.S. and North America.”
Researchers had a tough hill to climb to assess the damage of 2020 and project volumes for 2021 and beyond. The association delayed the study’s release given the volatility in the travel environment, and the report utilized data from many additional sources to validate trends and projections, GBTA’s Ely told BTN.
“The ‘rules’ of travel—if you want to call them that—are changing on a daily basis. If you look at X as it relates to Covid, a week later it’s different,” Ely said. “Governments are scrambling to [understand economic recovery] and plot a course, and because it’s changing so fast, you have to ask how good is the info you are getting. The good news is that we had more data sources this year than ever before. We got additional inputs on corporate travel and bookings on a global scale.
The 2019 BTI, which was released in July prior to the GBTA convention in Chicago, projected slowing growth for the segment, but estimated total global travel spend to hit $1.51 trillion in 2020. The Covid-19 pandemic reversed fortunes for the entire travel industry. The current report pegged 2020 global business travel spending at $694 billion.