ALEXANDRIA, Virginia USA, 4 February 2021: Business travel will not recover fully until 2025 according to projections made by the Global Business Travel Association (GBTA) arguably the world’s largest business travel association.
It released its annual BTI Outlook, a detailed analysis of business travel in 2020, with projections for 2021 and beyond earlier this week.
Now in its 12th year, the study of business travel spending and growth covers 75 countries across 48 industries. The report shows that the global financial impact of Covid-19 began in Q2 2020, resulting in an expected 68% decline (USD738 billion) from 1 April 2020 to the end of the year.
Because of the relatively strong (pre-Covid) 2020 first quarter, global spending on business travel is expected to show a 52% decrease for all of 2020 (USD694 billion), down from USD1.4 trillion in 2019.
2020 Losses and Challenges
- Global GDP is expected to have declined -4.4% in 2020, an unprecedented decline when compared to the -0.5% decline experienced during the Great Recession of 2008.
- Global trade is expected to contract by almost 11%, due to lockdowns that temporarily froze the movement of people and goods and forced a review of supply chain networks, resulting in many countries looking to source locally.
- Job losses in the business travel industry have been extensive. The loss in global work hours during 2020 compared to the end of 2019 was equivalent to 400 million full-time jobs in the hotel, airline, airport, ground transportation, restaurant and other service provider segments.
- Business travel had grown for 10 consecutive years, with an average growth rate of 5.1% per year right up to the first quarter of 2020.
- The 2020 business travel spending losses are expected to be 10 times larger than the impact of either 9/11 or the Great Recession of 2008.
Forecast on Business Travel Recovery
- A 21% increase in business travel spending is projected in 2021. Most of this gain is expected to come at the end of 2021 as vaccinations increase globally, and consumer confidence returns.
- In 2022, the BTI Outlook forecasts further acceleration in business travel, including a significant pick-up in group meeting activity and international business travel.
- While annual business travel spending growth is expected to slow somewhat in 2023, it is projected to remain well above historical average rates of growth of 4.6%. By the end of 2024, annual business travel spending is projected to reach approximately $1.4 trillion, nearly equaling the 2019 pre-pandemic revenue peak of USD1.43 trillion.
- A full recovery to pre-pandemic levels is expected by 2025.