GBTA Foundation Report Shows China Business Travel Spend Will Continue to See Double Digit Increases in 2015, 2016
Shanghai (March 10, 2015) – The GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), today announces the results of its latest GBTA BTI™ Outlook – China report, a semi-annual analysis that relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market. The report, sponsored by Visa Inc., includes the GBTA BTI™; an index of business travel spending that distills market performance over a period of time.
China’s so called “soft landing” continued during the second half of 2014. This describes a condition where overall growth moderates in an orderly fashion while the underlying drivers of that growth shift away from investment and exports towards 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.
GBTA slightly downgraded its forecast for Chinese business travel from its outlook published in the second half of 2014 due to expectations for slower economic growth in China coupled with continued uncertainty in the global economy. Total spending on Chinese-originated business travel grew an estimated 16.6 percent in 2014 to $261 billion USD. GBTA projects it will continue to grow 14.2 percent in 2015, down from our previous projection of 18 percent, and will grow another 12 percent in 2016 reaching $334 billion USD.
“While this is slower growth for China, it is all relative,” said Michael W. McCormick, GBTA executive director and COO. “There is simply no other market to compare China to as their economic engine continues to move forward at a phenomenal pace producing double digit business travel spending growth. Whether China becomes the world’s largest business travel market at the end of 2016 or the beginning of 2017 does not matter – what matters is that economic policies being set 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.”
“China’s economic growth projections in the near term remain robust, which bode well for a strong business travel market, growing more rapidly than the other major markets globally,” said Stanford Lin, Vice President and Head of Products at Visa China. “Visa is committed to working with financial institutions and merchant partners to offer value-add benefits that help companies and business travelers better manage their travel expenses.”
More key highlights of the report include:
• 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.
• 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.
• As previously forecasted, China is poised to overtake the U.S. 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 GBTA BTI™ Outlook – China is free of charge to all GBTA Members by clicking here. Non-members may purchase the report through the GBTA Foundation by emailing [email protected]
About the GBTA BTI™ Outlook – China
The GBTA BTI™ Outlook projects aggregate business travel trends over the next eight quarters. The report tracks total business travel spending, plus spending in the domestic and outbound business travel segments. It relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market. GBTA BTI™ Outlook – China 2015H1 is the seventh report in the semi-annual series. Semi-annual reports will be released each March and October.
The GBTA BTI™ Outlook uses an econometric model to better inform the forecast process. The model explicitly relates measures of business travel spending, uniquely sourced from other GBTA Foundation research, to key economic and market drivers of business travel including: Gross Domestic Product (GDP) and its components; employment and unemployment; measures of business and consumer confidence; international trade, foreign direct investment and exchange rates; commodity and oil prices; inflation measures; productivity rates for business travel; International Air Transport Association (IATA) Passenger and Revenue Performance and Smith Travel Research (STR) Global Hotel Performance.
About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world’s premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. Collectively, GBTA’s 7,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA provides its growing network of more than 28,000 travel professionals and 125,000 active contacts with world-class education, events, research, advocacy and media. The Foundation was established in 1997 to support GBTA’s members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbta.org/foundation.