GBTA released its latest business travel forecast for China today as part of a semi-annual series. Sponsored by Visa Inc., the report relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market.
Here are the top five takeaways:
- China continued its so-called “soft landing” during the second half of 2014 shifting away from investment and exports as the main growth drivers and shifting toward consumerism. China’s central authorities have skillfully applied fiscal, banking and regulatory policies to ensure that both goals continue to be met while still avoiding rapid increases in inflation and overheating local government debt. These economic policies are showing signs of having a long term positive impact on the economy, which points to a healthy business travel industry for years to come.
- The GBTA Foundation report shows China business travel spend will continue to see double digit increases in 2015 and 2016 growing 14.2 percent in 2015 and another 12 percent in 2016 reaching $334 billion USD.
- A welcome surprise to China’s second half economic growth in 2014 has been provided by trade. Chinese exports rebounded strongly in 2014, and continued rising exports bode well for Chinese international outbound (IOB) travel in 2015 and beyond. GBTA expects IOB spending will continue to grow at double-digit rates projecting 13.6 percent in 2015 and 11 percent in 2016 hitting $14.3 billion USD, but will see challenges as the world economy remains on shaky ground.
- GBTA expects China to continue to grow its domestic business travel market much more rapidly than the other major markets in the world with projected spending growth of 14.2 percent in 2015 and 12.1 percent in 2016. As previously forecasted, China is poised to overtake the United States as the number one business travel market in the world. Given our current projected growth in business travel in the two markets, we expect China to surpass the U.S. in spending by 2017.
- The extraordinary growth in both leisure and business travel demand has led hoteliers to significantly increase their presence in China over the last decade. Demand growth outpaced supply growth in every class of hotel – luxury and upper upscale hotels typically favored by business travelers led this trend.
GBTA members can access the full report on the GBTA Hub.