China, India to drive business travel growth
Global business travel spending will increase 9.2% in 2011, driven by emerging markets such as China and India. This was the key finding of a report by the GBTA Foundation, the research arm of the Global Business Travel Association. The Global Business Travel Spending Outlook 2011-15 study, sponsored by Visa, reveals that business travel spending around the world increased 8.4% to US$924 billion 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 US$1 trillion.
A significant finding of the report is that, similar to global economic growth, business travel spending is seeing two-speed growth, with emerging markets such as China, India, Brazil and Russia projected to grow two to three times faster than developed economies like the US, France, Germany and the UK.
Business travel spending is expected to grow 11.2% in China from 2011-15, slightly faster than India (10.8%). Russia (7.1%) and Brazil (7.0%) will also see strong growth, however the US is only expected to expand at 3.8%, while Germany’s rate of increase will be just 2.9%.
“The recovery is happening, it’s just not happening as quickly as most people would like,” said Michael W. McCormick, GBTA’s Executive Director and Chief Operating Officer. “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.”
GBTA noted that the industry has benefited by the combination of a number of positive factors that have allowed it to recover well from the global financial downturn. Firstly, corporate balance sheets and profits have been strong due, in part, to the stringent cost controls put in place during the GFC. Secondly, the recovery in global trade growth dramatically boosted international business trips, and finally, rising airfares are boosting travel spend.
GBTA has also constructed the Business Travel Index (BTI) – a measure of the current and projected level of business travel. The Global BTI currently sits at 133 (2010), but is forecast to grow to 145 through 2011 and should reach 193 by 2015. As a point of comparison, the US BTI was 109 in 2010, whereas in China it was 286 and in India 197.
McCormick commented; “Our BTI offers a snapshot of where business travel is and where we think it will be going. Business travel is closely correlated to the overall state of the economy. Based on our research, we can say that the global economy is going to steadily
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