A robust business travel forecast by the Global Business Travel Association (GBTA) is belied by uncertainty over trade policies, which the association cites as the biggest wildcard that could derail a welcome recovery in corporate travel.
- A robust business travel forecast by the Global Business Travel Association (GBTA) is belied by uncertainty over trade policies;
- The GBTA describes uncertainty over trade policies as the biggest wildcard that could derail a welcome recovery in corporate travel;
- GBTA’s BTI Outlook – Annual Global Report & Forecast projects global business travel spending to grow 7.1% in 2018 and will expand to USD1.7 trillion by 2022;
- During 2018, GBTA believes 18 out of the top 20 business travel markets to outpace their growth average over the last five years.
The recently released GBTA BTI Outlook – Annual Global Report & Forecast, stated global business travel spend reached USD1.33 trillion in 2017, which was a 5.8% increase year-on-year. Projections show spending is forecast to advance another 7.1% in 2018 and will expand to USD1.7 trillion by 2022.
GBTA concluded the solid pick-up in business travel spend could signify an end to the ‘Era of Uncertainty’ in global business travel, “but but rising protectionism is coming at precisely the wrong time,” said Michael W. McCormick, GBTA executive director and COO. “The direction of trade policy is far and away the biggest wild card that could impact our forecast for global business creating uncertainty that could derail the recovery.”
According to GBTA’s research, growth in business travel spending was trapped in the three-to-five percent range annually since 2012; but the 2017-2018 time period is projected to be the strongest two-year period for business travel since the initial recovery from the Great Recession in 2010 and 2011.
In fact, during 2018, GBTA believes 18 out of the top 20 business travel markets to outpace their growth average over the last five years.
But the current high growth of business travel has largely been fuelled by improving economies around the globe, says GBTA. But hose improvements have been spurred by monetary and fiscal stimulus, which is likely to lead to slower economic growth down the road.
GBTA highlights four downside risks heading in 2019 : rising US interest rates resulting in increased debt payments for global borrower; maturing business cycles in developed markets triggering slower growth; rising budget deficits in developed and emerging markets posing challenges to major global economies; and rising protectionism leading to trade wars.
The association believes drastic increases in tariffs and associated retaliatory measures could have prove detrimental to the global business travel market. “An analysis of the mathematical correlation between the two shows nearly 60 percent of the variability in global business travel spend can be explained by global trade volumes,” the association stated.
“Intuitively, this makes sense as the movement of goods and services necessitates people, namely business travellers, to support global commerce,” said Mr McCormick.