The GBTA Crystal Ball: What Will the Next Five Years of Business Travel Look Like?
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.