Business travel in Western Europe is finally standing on solid ground. Companies however are still showing a penchant toward saving for the future in case the economy backslides – that pessimism is slowly starting to abate, but optimism has not fully set in. Still, the stronger economy, lower energy prices and smart fiscal policies are pointing to a strong 2015 and 2016 for business travel throughout the region.
Last week the GBTA Foundation released its semi-annual business travel forecast for Western Europe predicting spending growth for the region this year and next.
Here are five key takeaways from the study:
- Business travel spending in the five markets registered an estimated gain of 4.9 percent in 2014 to €1B ($186.3 billion USD). Spending is expected to increase by another 6 percent in 2015, to €154.79B ($197.47 billion USD) and 6.1 percent in 2016 reaching €164.15B ($209.41 billion USD), as economic momentum propels business travel spending forward.
- Germany and the UK led the way in business travel spending, but Spain’s business travel market also saw a notably strong business travel performance in 2014.
- The GBTA Foundation is seeing a shift toward domestic business travel demand driving growth more so than international outbound travel (IOB) as IOB spending will continue to remain challenged through 2015.
- Much of the growth of the European economy is driven by consumption and capital spending.
- Sharply lower energy prices are providing another boost for Europe’s consumers. Unlike a tax refund, this income boost will accumulate slowly with each successive utility bill or petro fill-up, so it will take time for the benefit of lower oil prices to be fully realized.