Business travel recovery in 2021 proceeded at a slower, more cautionary pace than expected from a year ago. However, global business travel spending is expected to surge in 2022, with full recovery expected in 2024 – ending the year on pace with the 2019 pre-pandemic spend of $1.4 trillion, and a year sooner than previously forecast.
The Global Business Travel Association’s (GBTA) business travel index, the BTI Outlook, analysed business travel spending and growth in 2021 across 73 countries and 44 industries, to create projections for 2022 and beyond, including post-Covid-19 recovery forecasts.
Global business travel activity has begun its rebound from the sharp downturn brought about by the Covid-19 pandemic. After declining 53.8% in 2020 to US$661 billion, global expenditures are expected to have rebounded 14% in 2021, to US$754 billion. This was more slowly than forecast in GBTA’s previous BTI Outlook report issued in February 2021.
Despite recovery setbacks in 2021, a year-over-year surge of 38% is expected in 2022 as recovery and pent-up demand kicks into a higher gear, bringing global business travel spending back to over US$1 trillion.
Recovery will continue into 2023, with global spending rising 23% year-over-year as even more international and group travel comes back online.
By 2024, global business travel is forecast to have made a full recovery, ending the year at US$1.48 trillion – just above the 2019 pre-pandemic spend of US$1.4 trillion.
In 2025, global business travel growth is forecast to slow to 4.3% – just below the 10-year average growth rate of 5.1% coming into 2020 – ending the year at a forecasted US$1.5 trillion.
However, persistent Covid-related threats and disruptions, supply chain strains, labour shortages, rising inflation, increased costs, and lagging recovery in Asian markets are just a few of the risks for continued on-target recovery. Additionally, yet to be determined are the potential impacts of emerging factors including broad adoption of remote working models, long -erm cuts or elimination of business trips and travel volume, and the increased focus on sustainability practices and policies for business travel.
Of any year we’ve issued the BTI Outlook forecast, this one was the most anticipated and it’s no surprise. The business travel industry recognises there are factors, related to Covid-19 and beyond, that could impact the road ahead over the coming years. However, there is optimism overall as the industry, companies and travellers worldwide lean into recovery and the much-needed return to business travel.
Other key findings from GBTA’s BTI Outlook include analysis of 2021 challenges for the business travel industry as well as recovery outlook into 2025.
Business travel faced headwinds in 2021
The global business travel recovery that began in late 2020 hit a fair number of bumps in 2021. Pandemic surges, variant introductions, uneven vaccination rates, and mounting supply-chain challenges all took their toll on previously forecast growth expectations.
North America led the recovery, the USA in particular, rebounding 27% in 2021. Business travel markets in Latin America, Middle East and Africa (MEA) and Asia-Pacific (APAC) all picked up 15% to 20% growth in 2021.
European markets lagged in 2021. Emerging Europe is expected to gain only 10%, and for the region of Western Europe, business travel expenditures for 2021 are expected to fall 3.8% from 2020 levels. This stems from early year underperformance, but with recent resurgence, business travel demand in the region is set to outpace most other parts of the world, barring any Covid-related setbacks.
Recovery in Asia Pacific has been slower, due to lagging border re-openings and a high dependence on international business travel. China’s expected growth was downgraded last year due to challenges posed by financial and other issues which could signal larger risks.
Business travel in Latin America is performing relatively better in terms of percentages –recognising that volumes vary significantly across global regions, boosted by fewer government restrictions and travellers’ desire and confidence to return to business travel. However, rising public debt and interest rates, declining credit ratings, and lower vaccination rates could pose future threats for Latin American business travel.
Total business travel spending – top 15 markets (2021)
Business travel recovery will also vary by industry. Professional and business services and real estate have been resilient to date, while wholesale trade has been challenged. Accommodation and food services, arts, entertainment and recreation, and retail trade, which were significantly impacted during the pandemic, are expected to recover sharply over the forecast period.
View from the C-suite
In a poll of 40 CFOs across North America, Latin America, Asia-Pacific and Europe, 70% felt in 2022 the overall economy in their country would be better or much better than in 2021.
About half (52%) of respondents reported they expect their company’s business travel spend to reach 2019 levels in 2022.
When asked about the importance of business travel for their company, CFOs felt the top return-on-investment reasons for business travel are sales and business development (68%), internal business planning and strategy (50%), client account management (48%), and employee training and development (48%).
Business travellers are ready and willing
Among 400 global business travellers polled, 86% report that they need travel to accomplish their business goals. A majority (81%) believe that their volume of domestic business travel will be greater or on par in 2022 than it was prior to the pandemic.
Over half (54%) miss travelling and hope to travel more often in the future. However, 43% wouldn’t mind travelling less in the future, whether they indicated they miss it or not.
Four in five (81%) of business travellers say their company requires vaccines for travel and in-person meetings.
Challenges to the pace of recovery
Global GDP growth is expected to reach 5.8% for 2021 and 4.2% in 2022. Should another wave of Covid materialise, China further decelerates, and/or an energy shortage intensify, more downward revisions may be necessary.
The BTI Outlook outlines four conditions necessary for full recovery in global business travel: the global vaccination effort, national travel policy, business traveller sentiment, and corporate travel management policy.
The recovery remains highly dependent on the vaccine rollout, employees’ return to the office, and a normalisation of travel policies on both the national and corporate levels. Travel managers will also face the challenge of juggling duty of care with rising costs, sustainability priorities, and new considerations on the ROI of business travel.
About the GBTA
The Global Business Travel Association (GBTA) is the world’s largest business travel and meetings trade organisation, headquartered in the Washington, D.C. area with operations across four continents. GBTA’s 9,000-plus members manage more than US$345 billion of global business travel and meetings expenditures annually. GBTA delivers education, events, research, advocacy and media to a growing global network of more than 28,000 travel professionals and 125,000 active contacts.