Business travel spending full recovery expected by 2026

Business travel spending full recovery expected by 2026
Business travel spending full recovery expected by 2026
Avatar of Harry Johnson
Written by Harry Johnson

Just as many COVID-related recovery conditions have improved, many macroeconomic conditions deteriorated rapidly in early 2022

The global business travel industry continues its progress towards full recovery to 2019 pre-pandemic spending levels of USD $1.4 trillion, but recovery has hit some headwinds. Just as many COVID-related recovery conditions have improved, many macroeconomic conditions deteriorated rapidly in early 2022.

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.

This is a central finding from the latest 2022 GBTA Business Travel Index Outlook – Annual Global Report and Forecast – an annual exhaustive study of business travel spending and growth covering 73 countries and 44 industries.

Ads: The metaverse for business – take your team into the metaverse

The 2022 BTI also reveals insights from recent surveys of global finance executives and business travelers. Additionally, it explores new and transformative factors in global business travel in the areas of sustainability, workforce dynamics (including remote work and blended travel or “bleisure”), and technology adoption.

Highlights from the latest BTI Outlook (in US dollars): 

  • Total spending on global business travel reached $697 billion in 2021, 5.5% above the pandemic-era low of 2020. 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 $36 billion of the $770 billion lost in 2020.
  • 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. Global business travel spending in 2022 is expected to advance 34% over 2021 levels to $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 traveler sentiment, and travel management policy – where conditions have improved significantly in the last six months.
  • Deteriorating economic conditions and shifting secular trends in 2022, however, have slowed global recovery. Hence, global business travel will almost reach pre-pandemic levels in 2025, reaching $1.39 trillion.
  • Global spending is not expected to make it fully back to the $1.4 trillion dollar mark until mid-2026, when it is forecast to reach $1.47 trillion dollars. This adds an estimated 18 months to the industry’s recovery than was forecast in the previous GBTA Business Travel Index released in November 2021.
  • The 2022 BTI finds the biggest obstacles to more accelerated recovery in global business travel are persistent inflation, high energy prices, severe supply chain challenges and labor shortages, a significant economic slowdown and lockdowns in China, and major regional impacts due to the war in Ukraine as well as emerging sustainability considerations. 

The Divergent Recovery in Global Business Travel Continues

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.

  • 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.
  • Business travel spending in Latin America grew modestly in 2021 as the vaccination effort got off to a slower start. While there may be challenges in this region over the next few years, 55% growth in spend in Latin America is forecast for this year as business travel recovers to 83% of pre-pandemic totals.
  • 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.

Business Travel and Finance Executives Highlight the Challenges and Opportunities

In July 2022, GBTA surveyed over 400 frequent business travelers and nearly four dozen executive travel budget decision makers across four global regions. Overall sentiment is positive, but also confirms COVID-19 concerns are taking a back seat to current macroeconomic and geopolitical issues.

  • 85% of business travelers surveyed said they definitely need to travel to accomplish their business goals. Over three-fourths said they expect to travel for work more or much more in 2023 than they did in 2022. 
  • 84% of senior global corporate finance professionals voiced confidence their travel spending would somewhat or significantly increase in 2023 compared to 2022.
  • 73% of business travelers and 38 of 44 senior global financial executives agree inflation/rising prices will impact travel volumes.
  • 69% of business travelers and 33 of 44 global financial executives are concerned a possible recession will impact travel.
  • 68% of business travelers and 36 of 44 financial executives expect Covid infection rates and variants to have an impact on their travel.



About the author

Avatar of Harry Johnson

Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for mroe than 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x
Share to...