The recovery of the business travel sector continues to grow at a solid pace across the world, according to the latest Global Business Travel Association (GBTA) statistics, however not as fast as originally forecast with several headwinds slowing down the industry’s full re-build.
Speaking at the 2022 GBTA Convention in San Diego, California, this week, GBTA’s CEO, Suzanne Neufang, said the business industry continues its progress towards full recovery to 2019 pre-pandemic spending levels of USD$1.4 trillion and that is now expected in 2025-2026, some 18-months late.
“Just as many Covid-related recovery conditions have improved, many macroeconomic conditions deteriorated rapidly in early 2022,” she said.
“These new developments are impacting the timing, trajectory and pace of business travel’s recovery, both globally and by region, pushing the forecast for full recovery into 2026 instead of 2024 as previously forecasted [in November 2021].”
The later than expected recovery is a central finding from the latest 2022 GBTA ‘Business Travel Index Outlook – Annual Global Report and Forecast’ published by GBTA and Mastercard, an annual exhaustive study of business travel spending and growth covering 73 countries and 44 industries.
“To understand the headwinds that have been impacting a more accelerated recovery for global business travel, all you have to do is look at the news headlines since the beginning of 2022,” she said.
“The factors impacting many industries around the world are also anticipated to impact global business travel recovery into 2025.
“The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026,” Neufang said.
According to the report, total spending on global business travel reached US $697 billion in 2021, 5.5% above the pandemic-era low of 2020.
Neufang said last year was nearly as challenging as 2020 for the global business travel industry, as it sought to carve out a “normal following” the Covid-19 pandemic. The industry gained back roughly US$36 billion of the US$770 billion lost in 2020.
The report revealed recovery was short-circuited by the Omicron variant and spike in global Covid cases in late 2021 and early 2022. As case numbers began to retreat, business travel surged, according to GBTA.
In a positive sign, global business travel spending in 2022 is expected to advance 34% over 2021 levels to US$933 billion, recovering to 65% of pre-pandemic levels.
“Recovery in 2022 was dependent upon and has been largely driven by improvement in the four factors of global business travel recovery – the global vaccination effort, national travel policies, business traveller sentiment, and travel management,” Neufang said.
She said in all, global business travel spending is expected to gain 33.8% in 2022, however, differences are anticipated across the world’s top business travel markets.
“The timing and pace of the recovery will continue to vary significantly from one region of the world to the next, as evidenced in 2021,” she said.
According to the report, North America led the recovery in 2021 – driven largely by rapidly returning domestic travel.
Western Europe was the one region to witness spending declines last year as Covid-19 impacted its domestic and regional business travel market.
Both regions are expected to experience the sharpest recoveries with compound annual growth increases of 23.4% (to $363.7 billion) and 16.9% (to $323.9 billion), respectively by 2026.
Asia Pacific helped lead the industry in terms of recovery of spend in 2021– particularly in China.
This reversed in 2022, as China’s Zero-Covid policy led to wide-scale lockdowns and other countries in the region only slowly opened up.
For 2022, a solid increase of 16.5% (or $407.1 billion) in spending is expected in APAC (held back by China at 5.6%, or $286.9 billion), with the region recovering to 66% of pre-pandemic levels by the end of 2022.