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At this week’s GBTA Conference in Frankfurt, the GBTA Foundation in partnership with BCD Travel is launching two newly updated and completely revamped global resources: the Sustainability in Travel Self-Assessment Tool and the Managed Travel Index® (MTI®).
“We are very proud to have been part of such important and wide-ranging projects,” said Kathy Jackson, BCD Travel’s executive vice president of global account management and executive chair of corporate social responsibility. “At BCD Travel we recognize that a travel program can contribute to a company’s goals by improving continuously. Both tools will help travel buyers bring their travel programs to the next level.”
The Sustainability in Travel Self-Assessment Tool will allow organizations to measure themselves in 10 different areas, identifying strengths and weaknesses in their travel program as it relates to sustainability.
The new tool will now provide recommendations based on input and will identify specific resources for improving or implementing sustainability initiatives for travel programs. The Sustainability Self-Assessment Tool can transform the entire process of planning and implementing a robust sustainability travel program.
The tool is incredibly easy to use and can be completed section by section over time, or all at once – it is up to you. Implementing a sustainability program is no easy task, but this tool is the perfect guide for any company looking to implement or improve upon successful sustainability initiatives.
The MTI® has been completely updated as well. The new tool is redesigned, improved and globalized, so those familiar with the older version would hardly recognize this one.
The Index helps benchmark the effectiveness of a managed travel program. It has been designed exclusively for non-supplier travel professionals. It is customizable to a specific program based on the information provided.
Like an expert consultant, it reviews your travel program and identifies specific ways to make it better. The tool and the recommendations are available in French, English, German and Spanish.
Because most travel professionals are short on time, the tool has also been designed similar to the Sustainability Self-Assessment tool to be completed in a variety of ways. You now have the ability to go section by section, saving your progress and returning as your time allows, or you can simply do it all in one sitting.
Both tools are available now to all GBTA buyer members.
Combined, these two global resources can help travel professionals with a start-to-finish assessment of their managed travel and sustainability programs.
On Monday, GBTA held a Gift of Knowledge Workshop in Chengdu focused on measuring the success of managed travel programs. The GBTA Foundation also released its latest business travel forecast for the Chinese marketshowing China remains one of the fastest growing business travel markets in the world.
Total business travel spending is expected to grow 9.2 percent this year reaching $317.9 billion USD. In 2017, another 8.4 percent increase is expected bringing total Chinese business travel spend to $344.6 billion USD. By comparison, U.S. business travel spending is expected to reach $293.1 billion USD in 2017, a $51.5 billion USD difference, further solidifying China’s new-found position as the largest business travel market in the world.
China accounts for nearly 25 percent of global business travel spending, up dramatically from a 5 percent share in 2000, demonstrating the truly global nature of today’s economy. While the projected growth rates are relatively slow for China, they still represent tremendous growth. We expect longer-term spending growth to continue to moderate until Chinese policymakers can achieve their goal of rebalancing the economy and diverting resources away from investment and towards consumption.
Here is a quick by the numbers look from the GBTA BTI™ Outlook – China 2016 H2 report:
Last week, the GBTA Foundation released its latest quarterly U.S. business travel forecast. Get the lowdown on top-line numbers from our forecast here:
In general, frequent business travelers are a content group with 88 percent satisfied with their business travel experiences and 84 percent that want to travel either the same amount or more frequently than they do now. It’s no secret that happy employees tend to be more productive, which could mean a better bottom line for your company. But what drives this satisfaction across workforces that are diverse in demographic, experience and generational differences? Today, the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), in partnership with American Express Global Business Travel released new research that explores what drives and impacts travel satisfaction for frequent business travelers by the generations.
The new study, Traveler Satisfaction: Exploring the Generational Divide in Business Travel, identifies four key themes that correlate with business travel satisfaction: booking, productivity during travel, tracking and reporting and personal life. Of these themes, only booking and productivity during travel play a role in forecasting frequent business traveler satisfaction overall. The other two emerged when breaking the data down by generation.
Breakdown by Generation: What Matters Most to Each Group
Booking covers everything from the variety of suppliers that travelers can choose from to book and how they are able to book to the ease of making changes to their trip and more. As booking is often a pain point for travelers, it’s no surprise that having a seamless booking experience drives satisfaction for business travelers of all ages.
Tracking and reporting focuses on variables including methods for submitting expense reports, tracking receipts and use of a personal or corporate card to pay for business expenses. Similar to booking, alleviating this pain point drives satisfaction for all business travelers.
Productivity during travel includes variables such as traveling on a plane, renting a car, staying at hotels and enrollment in a risk-based security program like Global Entry or TSA PreCheck among others. Overall, getting through airport security is an area of frustration for frequent business travelers and tools like Global Entry or TSA PreCheck help to mitigate these hassles. Frequent business travelers are paying for these tools themselves when their companies do not cover the cost (51 percent), and many have said that having these tools drastically improved their business travel experience.
Personal life, or the ability to maintain good relationships with friends and children while traveling for work, influences satisfaction for Baby Boomers. Interestingly, this theme is to unique to the Boomer generation and did not resonate with Millennials or Gen-Xers.
It is a true challenge for companies to build and sustain a satisfied employee base because of diverse generational needs. Acknowledging that there is not a “one-size-fits-all” solution is a step in the right direction for companies looking to improve employee satisfaction, particularly for employees who travel often to represent or promote their companies. The findings showed significant generational differences amongst frequent business travelers demonstrating that each generational group has unique needs. Companies should focus on supporting the key drivers of employee satisfaction and consider each driver through a generational lens.
Methodology: An online survey of 2,025 business travelers in the United States and Canada was fielded on January 4-19, 2016. This study focuses on 805 of those respondents who have traveled four or more times for business in the past year making them frequent business travelers.
Read the Full Report: The study, Traveler Satisfaction: Exploring the Generational Divide in Business Travel, is available free of charge. View the infographic and download the white paper by clicking here.
Learn More: A webinar featuring experts from American Express Global Business Travel and the GBTA Foundation will discuss business traveler satisfaction and take a deeper dive into the research on September 13 at 2pm ET. Complimentary registration is available now.
Additionally, we’ll be sharing more insights and findings from the research in posts to come. Check back here over the next few weeks to learn more.
Despite being overtaken by China as the world’s leading business travel market, the United States is still a vital nation when it comes to both the growth of the global economy as well as for the growth of global business travel. According to the recently released GBTA Global BTI Outlook – Annual Global Report and Forecast sponsored by Visa, despite a weak start to 2016, U.S. growth will slowly strengthen for the remainder of the year. This combined with other factors such as the impact of oil prices should help to bring the global economy with it.
With respect to business travel, weakness in some of the United States’ key trading partners such as Europe, China and other emerging markets will continue to be a challenge for international outbound business travel for American businesses and American travelers. Many of the most critical macro drivers of business travel are likewise giving mixed signals leading to the modest gains of the global business travel market.
Private sector employment gains have moderated in recent months averaging only 140,000 per month in 2016, down from an average of 220,000 the year before. Wage gains, on the other hand, have accelerated this year. The combination of reported average hourly wages and hours worked have lifted overall labor income by 3.5 percent this year. Business confidence statistics, conversely, suggest tepid optimism with ample concerns. The Institute for Supply Management’s (ISM) Manufacturing PMI rose to 51.3 in May, up from a disappointing 50.8 in April and a recent low of 48 last December. Given this mixed bag of business travel indicators, managers will likely continue to keep a tight grip on corporate expenses including business travel.
Given these factors and the general weakness and uncertainty of the global economy, we expect a slower than average year for business travel in 2016, which is poised to grow just under 1 percent. Spending is expected to hit nearly $357.5 billion USD in 2020, averaging a 3.3 percent annual growth rate per year between 2016 and 2020. Business travel growth from 2016-2020 will be led by the Real Estate, Professional & Business Services, Government, Social & Personal Services, and Food Processing and Services sectors, while the Petroleum Refining and Education sectors are expected grow the fastest at a rate of 15.1 percent and 8.6 percent respectively.
As of 2016 Q1, pre-tax profits are nearly 60 percent above their recessionary trough and 20 percent above the previous peak (2006 Q3). On the other hand, business travel spending is currently ahead of its trough by just short of 30 percent, and only 6 percent ahead of its previous peak (2007 Q4) indicating that growth will continue, albeit at a slow pace.
Similarly, many key indicators of U.S. economic performance registered a sluggish start to 2016, but a more optimistic outlook is in the cards when looking at the forecast for the remainder of the year. GDP, for example, rose at a 0.8 percent rate in the first quarter. Experts have cited a number of reasons for this weak outturn including slow global growth, plunging oil exploration investment, a weak manufacturing sector and inventory reductions. While U.S. growth is historically weak, it is comparatively strong when measured against some of its major trading partners within the global economy.
Consumer spending, housing and modest government spending, continue to drive U.S. growth as a weak first quarter transitions to stronger performance for the rest of the year. Growth will remain in the 2 percent range, however, well below long-term averages. The good news is that two years of strong job gains and, more recently, rising wages, plus lower energy prices and a wealth boost from rising housing and stock prices has bolstered consumer spending. Consumer confidence continues to rise and with it, spending. Retail sales growth has improved in the first half of 2016, despite some moderation in auto and durable purchases.
The relatively good news from the consumer side of the economy continues to be offset by slower investment spending and anemic trade performance. Slower global growth is limiting contributions from net exports, capital spending and the manufacturing sector. Lower oil prices, while a windfall for consumers, are hammering oil exploration and associated equipment spending, so much so that overall nonresidential fixed investment spending fell at a -5.9 percent rate during 2016 Q1.
There is mounting evidence that this environment of slower growth has become the new normal and may be lowering future expectations of sales while raising risk premiums and heightening managerial caution. Although consumer confidence is on the rise, business confidence remains tepid. The result is more caution and less capital spending, tighter expense management and less human capital investment, and slower business travel growth. In fact, this may partially explain why record profits and cash flow have not translated into commensurate business travel spending performance on par with their long-term correlation.
The slow growth environment of the U.S. and global economies has taken a toll on many fronts leading to this ‘new normal’ of slow, but steady one to two percent progress. Favoring dividends, M&A and stock repurchases over investing in capital, people and business travel in this environment could come back to haunt U.S. businesses. When growth does re-accelerate, companies must be ready with the newest technologies, the most productive workforce and the critical customer relationships necessary to take full advantage.
All eyes will be on Rio in the coming weeks as the 2016 Summer Olympic Games get underway with the Opening Ceremonies taking place tonight. While there have been numerous reports of facilities that are either incomplete or in disrepair, the games will go on, and Brazil is hoping that the Games will help give its economy a much needed boost. While officials have stated that all construction and infrastructure projects will be ready in time for the games and the influx of tourists they are hoping for, but with less than a week before the Opening Ceremonies, Rio officials are working under a tight deadline, and even if all projects are not ready in time for the Games, Brazilian officials hope that the improvements to the nation’s infrastructure will pay dividends down the road… But will they?
Like Beijing and Sochi before it, Rio is using the games to invest heavily in public works projects that, in theory, will help improve the city years after this year’s Closing Ceremonies later this summer. China, in particular, was praised for the development and investment that it made in its Summer Olympic Games in 2008, while Sochi has seen much less of a lasting impact. If one judges the infrastructure improvements developing or emerging markets make in preparation for a global event such as the Olympics, data from the GBTA Foundation’s latest Global BTI Outlook – Annual Global Report and Forecast indicates that event-driven projects do not always live up to their billing in years following the Olympics.
According to The World Economic Forum’s Global Competitiveness Report, China ranks 51st in overall infrastructure, Russia ranks 64th and Brazil ranks 123rd. While all three of these nations fall outside of the top 50 in terms of the quality of their infrastructure, both China and Russia do comparatively better with respect to their railroad infrastructure. When it comes to roads, Brazil and Russia both score close to the bottom – at 121 and 123, respectively – while China ranks 42nd.
Clearly one event – even a massive one like the Summer Olympics – will not propel a country’s infrastructure from 123rd into the top 10. If, however, there can be enough of an improvement to make travel throughout a country safer and more convenient for both leisure and business travelers, then that is a benefit of hosting the Olympics that will help a host nation for years to come. Considering the majority of the travel to Rio for the Olympics will be leisure in focus, it is hard to tell if it will lead to a great impact on future business travel, but given Brazil’s recent struggles, having even marginal improvements to their infrastructure could help them attract more travelers and generate more economic activity.
Last month, the GBTA Foundation and Carlson Wagonlit Travel (CWT) released the 2017 Global Travel Price Outlook. The third annual report provides global, regional and country-by-country projections for air travel, hotel, ground transportation and meetings and events prices in 2017.
At GBTA Convention 2016, I had the opportunity to sit down with Yon Abad, Senior Director of the Americas for CWT Solutions Group, to talk about what this report means for the industry – both for buyers and suppliers – as well as how global uncertainty and recent events like the Brexit may impact the forecast.
The report identified six key risks heading into 2017 that could impact both travel industry prices and the global economy as a whole: emerging market performance, financial market turbulence, geopolitical risks, uncertainty surrounding Brexit, potentially fluctuating U.S. interest rates and oil prices.
The outlook provides pricing forecasts across the four industry segments for 30 countries. Here are some global highlights:
Airline prices are projected to increase only slightly (2.5 percent) in 2017, while fares may actually fall below 2015 levels in some markets due to continued low oil prices. Ancillary fees will have an increasing impact: they grew to 7.8 percent of global airline revenue in 2015, up from 6.7 percent in 2014 and that trend is set to continue.
Mega hotel mergers are grabbing headlines, but their impact on prices likely won’t be felt until 2018. Hotel services such as room service, laundry and security remain important to corporate travelers. Traditional hotels, therefore, remain an attractive option for business travelers, despite the sharing economy options.
An intensely competitive climate will dictate continued flat pricing for the global ground transportation sector.
Meetings & Events
Modest increases in cost per attendee, per day, for meetings and events are expected for Asia Pacific and North America. Europe is expected to remain flat and Latin America will see a decrease of 10 percent. Group sizes will increase marginally in the 3-6 percent range for Asia Pacific, Europe and North America, while remaining flat in Latin America.
For the full report, click here. As you work on your budgets for next year, plan to join our webinar on October 5, on the 2017 Outlook to learn how to get the most out of your travel spend in 2017.
While it is hard to predict the future with certainty, GBTA certainly does a good job of forecasting trends that affect the future of business travel. The recently released GBTA Foundation Global BTI Outlook – Annual Global Report and Forecast sponsored by Visa aims to do just that. Looking ahead five years, the report concludes that business travel will continue on pace with slow, steady growth while being limited by global economic factors. Only time will tell if the most recent forecast holds up, but if past performance is any indicator, the future of business travel will likely adhere very closely to the report’s findings.
Global business travel spend topped $1.2 trillion USD in 2015, growing 5 percent over 2014, and is forecast to reach 1.3 trillion in 2016 while continuing to advance 5.8 percent on average over the next five years reaching $1.6 trillion in 2020.
The outlook for the global economy has improved in the early part of 2016. The volatility in financial markets and resulting impacts on confidence and risk aversion has largely subsided. Meanwhile, China’s recent steady performance has also calmed jitters. Additionally, sound monetary policy, fiscal stimulus strategies and strong consumer spending have all helped to mitigate anxiety in the global market and foster the current slow and steady growth model that the global business travel market is experiencing.
Upside growth potential remains limited for both the global economy and global business travel, however. The fragilities that have dogged global performance since the early part of the last recovery have not fully dissipated – nor has anxiety over “The New Normal” of low interest rates and low job creation that has characterized the recent recovery. Additionally, debt – both public and personal – is still high, trade remains weak, and geopolitical challenges abound. Income inequality still challenges continued progress in living standards and consumer spending. Moreover, the pace of the labor market and other reforms has slowed in the past year or so. Finally, the strength of the global economy will continue to be shaped by financial markets, which are now more integrated and have to cope with a great variety of potential risks against a backdrop of more anemic growth.
What this all means is that the recent trend of slow, steady growth will continue for both the global economy in general and for global business travel specifically. As is often the case, global business travel will be a driver in many economies, and will experience higher levels of growth than the economy as a whole. Looking into the proverbial crystal ball, it is more than likely that the next five years will look very similar to this year with respect to global and industry growth.
People who work in the global travel industry know that theirs is a robust and growing market. Certainly, travel buyers, suppliers, managers and individual travelers alike know that global business travel spurs growth, fosters vital relationships and establishes the framework for innovation. Still, $1.2 trillion is a big number – roughly equivalent to Spain’s GDP according to the World Bank – yet that is how much was spent on global business travel in 2015. That is just one of the findings from GBTA’s new BTI™ Outlook – Annual Global Report & Forecast,sponsored by Visa.
The latest report from GBTA found that, despite continued global uncertainty, cautious optimism is driving a positive business travel forecast that is focused on steady, moderate growth worldwide. Specifically, the report predicts global business travel spend to advance 5.8 percent on average over the next five years reaching $1.6 trillion in 2020. Despite global business travel’s overall impact on the global economy, the report also makes clear that global business travel is affected by global trends as much as it drives them.
China, for example, is now the largest global business travel market in the world, totaling $291 billion in total spend. Despite years of rapid growth, China is beginning to moderate in terms of both GDP growth and business travel growth. The United States is close behind China with $290 billion in total spend, and India and Indonesia are both projected to witness double-digit growth for the next five years. Additionally, the fallout from the Brexit vote means that uncertainty will be driving much of Europe’s slow growth for the near future with a real impact on the overall global economy.
This year also represents 15 years of global business travel data tracked by GBTA. Over that time, business travel has evolved. In 2000, $634 billion was spent on global business travel. That amount has since doubled. Growth has been driven by an increasingly connected world and the rapid maturation of a number of key business travel markets.
External forces have had a dramatic impact on the global economy and global business travel as early in the millennium business travel volumes were held back in many developed economies that were battling recession. By 2004, however, the global economy was back in full swing and business travel prospered between 2003 and 2008. Beginning in late 2008, the Great Recession and Financial Crisis began and global business travel again plummeted. Over the next few years global business travel began to grow, outpacing the recovery in the overall global economy. Following the robust recovery period for business travel in 2010 and 2011, global business travel spending growth entered the doldrums only growing in the 3 percent range.
Now we are in an era of uncertainty driven by global forces such as Brexit, a presidential election in the U.S., a slowing of China’s economic growth, and ongoing crises in several parts of the world. This uncertainty is limiting but not eroding global business travel growth that will continue to see moderate gains into the foreseeable future.
The top ten business travel markets in the world are not static. Indeed, recent GBTA Foundation BTI reports have shown that China has overtaken the United States as the largest business travel market in the world. There is a significant margin between the number one and two markets – China with $291 billion spent on business travel and the U.S. with $290 billion spent on business travel – and third place Germany with $64 million in business travel spending.
According to the recent Brazil Outlook BTI sponsored by Visa, the second half of the top ten business travel markets could be in for a bigger shake-up – with Brazil at risk of dropping out altogether. In early July, with the release of our Global BTI report, we will have the latest rankings and may see some changes. A deterioration in Brazilian-originated business travel spending has led to Brazil falling in the rankings of the top business travel markets in the world. The Brazilian market was once the seventh largest in the world measured in total business travel spend. Over the last two years, however, the country has fallen to the number nine spot, being surpassed by South Korea and Italy. It is likely to fall to be overtaken by India and fall to the tenth spot in the near future.
The rise in the Brazilian middle class over the previous decade helped accelerate Brazil’s economic activity and giving the country international acclaim as one of the BRIC countries held up as a model of prudent development. These gains also lead to a rapidly advancing business travel market. Brazil’s business travel and economic growth have stagnated over the last few years and its business travel market is in significant danger of backsliding and losing much of the momentum gained in the early 2000s.
More alarming is the poor state of Brazil’s infrastructure. While some gains have been made in preparation for the Summer Olympics, the World Economic Forum’s (WEF) 2015-2016 Global Competitiveness report ranked Brazil 123 out of 144 countries for quality of infrastructure, falling three spots from last year and a cumulative twenty-four spots over the last four years. This is by far the lowest of any of the other BRIC countries or of any of the other top 10 business travel markets.
Optimistically, The WEF report ranked Brazil’s airport infrastructure 95 out of 144, which is up 28 spots over the last two years. These gains are likely due to the privatization of several of the country’s airports.
While the immediate future will be difficult for Brazil, the latest BTI report predicts that 2016 will be the nadir of Brazil’s woes. Indeed, continued privatization in the highway and rail sectors is expected to generate approximately $66 billion USD in new investment over a 25-year horizon, with the majority of funds to be disbursed over the next few years. Projects include a high-speed rail between Rio and Brasilia. These infrastructure improvements will be critical for Brazil to regain footing as a top business travel market over the next 10 to 15 years.