One of the most talked about post-pandemic topics in commercial aviation has been business travel.
Some have warned about its permanent demise, others have talked about the blending of business and leisure, and some held on to the hope that the business travel of yesterday would return.
The latest data published gives us a glimpse into the future. Global Business Travel Association (GBTA) published its 2022 Business Travel Index Outlook – Annual Global Report and Forecast with business travel occupying some of its central findings.
They found that although global business travel spending is increasing, recent events have pushed back business travel’s forecasted full recovery into 2026 instead of the original forecast of 2024.
Macroeconomic Conditions Delaying Business Travel Recovery
As travel has opened up and restrictions have been lifted, we’ve seen a capacity increase from 2020 to 2021 and 2022, as represented by the graph produced by OAG below.
However, macroeconomic conditions have stymied some of this growth, particularly for business travel.
“To understand the headwinds that have been impacting a more accelerated recovery for global business travel, all you have to do is look at the news headlines since the beginning of 2022," said Suzanne Neufang, CEO, GBTA.
"The factors impacting many industries around the world are also anticipated to impact global business travel recovery into 2025. The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026.”
Specifically, according to GBTA, the biggest obstacles to an accelerated business travel recovery are:
- Persistent inflation
- High energy prices
- Supply chain challenges
- Labor shortages
- Economic slowdown
- Lockdowns in China
- Regional impacts due to the war in Ukraine
- Sustainability concerns
Total Business Travel Spending
In total, global business travel spend reached $697 billion in 2021, which is 5.5% above the pre-pandemic low in 2020.
Last year remained a challenging time for business travel as it was challenged by the Omicron variant and Covid spikes. There was a direct correlation between falling case numbers and increasing business travel spending.
Global business travel spending in 2022 is expected to advance 33.8% over 2021 levels to $933 billion, recovering to 65% of pre-pandemic levels.
Global vaccination, national travel policies, business travel sentiment and travel management policy improvements have spurred on growth.
Below is a complete year-by-year breakdown of global business travel spend from GBTA.
Regional Breakdown of Business Travel Spend
From a regional perspective, North America led recovery in 2021 largely because of domestic travel.
On the other hand, Western Europe witnessed spending declines last year because of Covid-19 and related policies. However, regions are expected to experience the sharpest recoveries with compound annual growth increases.
Asia Pacific — and specifically China — helped lead industry recovery in 2021. Unfortunately, this flipped in 2022 due to China’s wide-scale lockdowns and the slow recovery of other countries in the region.
Even with China’s struggles, APAC is set to see an increase of 16.5% in spending.
A slow start to vaccinations led to a small increase in business travel spend in Latin America in 2021. However, 55% growth in spend is forecast in Latin America for 2022, with business travel expected to recover to 83% of pre-pandemic levels.
One other interesting take away is that 85% of business travelers surveyed said they “definitely need to travel” to accomplish their business goals, while over 75% said they expect to travel for work more or much more in 2023 than they did in 2022.
In total, this the 14th edition of GBTA’s study covered 73 countries and 44 industries.