Business travel spending is expected to hit full recovery by 2026 – rental operations

The global business travel industry continues its progress towards a full recovery to 2019’s pre-pandemic spending levels of $1.4 trillion, but the recovery has created some upsides.

Many macroeconomic conditions have worsened in early 2022 as many VVID-related recovery conditions improve. In the year Not by 2024, as previously predicted, but by 2022, according to the GBTA Business Travel Index Outlook – Annual Global Report and Forecast (published by the Global Business Travel Association and powered by MasterCard).

Launched at the 2022 GBTA Convention in San Diego, the GBTA BTI is an annual study of business travel spending and growth covering 73 countries and 44 industries. Now in its 14th edition, this latest report outlines the outlook for global business travel from 2022 to 2026.

“To understand the headwinds that could impact a more accelerated recovery for international trade travel, all you have to do is look at the news headlines from early 2022,” said Susan Nufang, CEO of the GBTA. “Factors affecting many industries around the world are expected to have an impact on the recovery of global business travel in 2025. We are close to the predicted results, but we will not be able to reach and surpass the 2019 pre-pandemics until 2026.”

The previous BTI, released in November 2021, predicted that global business travel spending would rise in 2022, reaching a full pre-pandemic level of $1.4 trillion by 2024.

Here are some highlights from the 2022 BTI outlook:

• Total spending on international business travel will reach $697 billion in 2021, up 5.5% from the 2020 pandemic low.. Last year was as challenging as 2020 for the global business travel industry as it struggled to make the pandemic a “normal sequel”. In the year By 2021, the industry has recovered about $36 billion of the $770 billion lost in 2020.
• A recovery in late 2021 and early 2022 was short-lived in Omicron’s alternate and global covid cases.. Business travel increased as case numbers began to recede. In the year Global business travel spending is expected to grow 34% to $933 billion in 2021 levels in 2022, a 65% recovery from pre-pandemic levels.
• In the year The recovery in 2022 is dependent on and overall improvement in the recovery of international business travel due to the four factors.. These four factors are global vaccination efforts, national travel policies, business traveler sentiment, and travel management policy.
• In the year Deteriorating economic conditions and changing global trends slow global recovery in 2022. Therefore, global trade will reach pre-pandemic levels by 2025, reaching $1.39 trillion.
• Global spending is not expected to fully return to $1.4 trillion until mid-2026.. That’s when it was predicted to reach $1.47 trillion. This adds up to an estimated 18 months of recovery for the industry, ahead of what was predicted in the previous GBTA Business Travel Index.
• 2022 BTI will find the biggest obstacle to accelerated recovery in international trade. These obstacles include persistent inflation, high energy costs, severe supply chain challenges and labor shortages, economic slowdown and lock-in in China, major regional impacts from the war in Ukraine, and emerging sustainability issues. .

Overall, global business travel spending is expected to gain 33.8 percent by 2022, but differences are expected in the world’s top business travel markets. As seen in 2021, the timing and pace of recovery will vary significantly from one region of the world to another.

North America He led the recovery in 2021 – largely fueled by rapidly returning domestic travel. Western Europe was one of the areas to see spending decline last year as Covid-19 impacted the domestic and regional business travel market. Both regions are expected to experience rapid recovery in 2026, with annual growth of 23.4% (to $363.7 billion) and 16.9% (to $323.9 billion) respectively..

Business spending in Latin America will grow modestly in 2021 as vaccination efforts begin slowly. While there may be challenges in the region over the next few years, 55 percent growth in spending in Latin America is forecast this year as business travel recovers to 83 percent of pre-pandemic levels.

Asia Pacific has helped lead the industry in terms of spending recovery in 2021, particularly in China. This changed in 2022, when China’s zero-covid policy led to large-scale lockdowns and the gradual reopening of other countries in the region. For 2022, a 16.5% (or $407.1 billion) increase in spending is expected in APAC (capped by 5.6%, or $286.9 billion in China), with the region recovering from epidemic levels to 66% by the end of 2022. .

In July 2022, GBTA surveyed more than 400 business travelers and nearly four dozen executive travel budget decision makers in four global regions. Overall, while sentiment is positive, it confirms that Covid concerns are taking a backseat to current macroeconomic and geopolitical issues.

• 85% of business travelers say they need to travel to achieve their business goals. More than three-quarters said they expect to travel for work as much or more than they did in 2023.
• Compared to 2022, 84% of senior global corporate finance professionals believe their travel spending will increase somewhat or significantly in 2023.
• 73 percent of business travelers and 38 out of 44 of the world’s top financial executives say inflation/price increases will affect the amount of travel.
• 69 percent of business travelers and 33 out of 44 global financial executives are concerned that the recession will affect travel.
• 68 percent of business travelers and 36 out of 44 financial executives expect the rates and variances of the Covid infection to affect their travel.