The Global Business Travel Association has published its annual BTI Outlook, which forecasts an eventual full recovery for the industry by 2025.
The BTI Outlook, now in its 12th year, is an exhaustive study of business travel spending and growth covering 75 countries across 48 industries.
The true global financial impact of COVID-19 began in Q2 2020, resulting in an expected 68% decline (to US$738bn – or €617bn) from April 1, 2020 to the end of the year. Because of the relatively strong (pre-COVID) first quarter of 2020, global spending on business travel is expected to show a 52% decrease for the full year.
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.
Coming into 2020, business travel had grown for 10 consecutive years, with an average growth rate of 5.1% per year.
The impact of COVID-19 on business travel has varied by region.
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 US$1.4tn, nearly equalling the 2019 pre-pandemic revenue peak of US$1.43tn.
A full recovery to pre-pandemic levels is expected by 2025.
“The pandemic has been devastating for business travel and it’s clear our industry will take some time to recover given the challenges we’re facing on multiple fronts,” said Dave Hilfman, interim executive director of GBTA. “Economic recovery is already underway, although very uneven across countries and sectors.”
“The continued rollout of the vaccine will be central to recovery globally, as will decisions the new Biden Administration makes regarding global trade and border and quarantine policies. GBTA will continue to work on restoring consumer confidence so travel can come back safely,” added Hilfman.
GBTA slams quarantine measures
As the governments of the United States, Canada, United Kingdom and the European Union broaden or impose quarantine periods for international travellers, the Global Business Travel Association issued a statement highly criticising the policies.
“The move towards quarantines despite multiple studies that question their effectiveness is a real problem,” said Hilfman. “The science suggests that quarantines rank far down the list of effective COVID-19 mitigation measures. Pre-departure testing can help ensure the safety of travellers and residents, while allowing essential international travel to take place without compromising public health. At a time when the business travel industry continues to fight for its existence, a comprehensive approach that does not embrace quarantines can help stop the pandemic and stop the further proliferation of job losses and financial ruin.”
New Coronavirus business travel survey indicates “light at end of tunnel”
Another poll by the association at the start of this year indicates that more than half (54%) of GBTA poll respondents expect most of their employees will return to the office by August (Q3). Just 8% report most of their employees have already returned to the office, 17% expect their employees to return to the office in the next 1-4 months and an additional one-third (29%) expect employees to return to the office in 5-8 months.
10% expect their employees to return in nine months or longer. One-quarter (26%) report they have not decided and an additional 11% of respondents are unsure.
Plans to resume non-critical business travel follow a similar trajectory as returning to the office. 6% of respondents report their company has resumed non-business critical business travel. 13% of GBTA members report they expect employees to resume non-critical business travel in the next 1-4 months and 29% expect this travel category to resume in 5-8 months.
An additional one in five expect non-critical business travel to resume within 9 months or more (20%) or have not made a decision (20%). An additional one in ten (11%) are unsure.
Vaccines are key
The vaccine continues to be at the forefront of the recovery plan. When asked to assess comfort with allowing employees to travel for business if certain travel industry workers — such as flight attendants, pilots and hotel employees — are classified as essential workers (which could allow them to receive their vaccination before the general population), a majority say they would. Two-thirds (64%) of GBTA member company respondents report vaccinating certain travel industry workers would make them “somewhat” or “a great deal” more comfortable. One in four (27%) say it would make them “a little bit” or “not at all” comfortable and one in ten (9%) are unsure.