Business travel in the wake of the pandemic: Insights from GBTA’s Annual Forecast
Some studies suggested up to 40 per cent of airline business travel may not return after the pandemic. This is particularly concerning given that pre-pandemic, the business traveller made up approximately 12 per cent of airline passengers but up to 75 per cent of revenues on flights.
There has been much speculation about the future of business travel in the wake of the pandemic and needless to say, the answer matters to the aviation industry.
The latest 2023 GBTA Business Travel Index™ Outlook – Annual Global Report and Forecast published by the Global Business Travel Association in collaboration with Visa, outlines the trajectory of business travel in the coming years, contextualising this within the post-pandemic landscape and the predictions are promising.
The forecast is packed with eye-catching statistics, but one standout finding is that “for the first time since 2020, the COVID-19 pandemic is no longer the key determinant of business travel activity.” This marks a significant shift. The report highlights that while this does not mean “we are out of the woods” in terms of recovery, “the pandemic’s overall influence on the direction of business travel is less important than other drivers like the macroeconomic, sustainability initiatives and shifts in workplace trends.”
Strengthening the optimistic predictions for the recovery of business travel, the report also forecasts that global business travel spending will recover to its pre-pandemic total of $1.4 trillion in 2024 and grow to nearly $1.8 trillion by the end of 2027. This is two years earlier than predicted last year, and it attributes this to more favourable economic conditions in 2022 and 2023.
Although these trajectories are promising, business travel recovery is not uniform across regions. Western Europe was the fastest growing region in 2022 growing 109 per cent. Conversely, APAC was was the slowest growing region last year, heavily influenced by the economic shutdown in China. Chinese business travel spending dropped 4.6 per cent last year, pushing China into the second largest business travel market in the world for the first time since 2014. Nevertheless, it is predicted to return to the number one business travel market in the world by the end of 2023.
Zooming in on the behaviour of business travellers, the findings support the rise of “bleisure” travel and identify key patterns in actions with regards to fintech. The report highlights that 62 per cent of business travellers are blending business and personal travel more than they did in 2019, with 42 per cent adding additional leisure days to their business trips and 79 per cent of these travellers staying at the same accommodation for business and vacation portions of their trip. Additionally, 64 per cent of business travellers who are given a corporate card have uploaded their card to a mobile wallet with almost 87 per cent using their mobile wallet for at least 10 per cent of their business transactions.
Reflecting on the findings in the report, Suzanne Neufang, CEO, GBTA said:
“This latest forecast now indicates an accelerated return to pre-pandemic spending levels sooner than anticipated as well as growth ahead in the coming years. Business travel spending is a key indicator, but how travel volumes will continue to rebound is yet to be seen.”
The impact of the pandemic on business travel was substantial. Now, as its influence wanes, the industry is well positioned to navigate other forces towards a bright future. With various stakeholders including American Airlines “betting against the traditional business of business travel,” the nuances of its recovery continues to be of the utmost importance to the broader industry.
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