The suits are back in the air.
Business travel spending is accelerating on pent-up demand, return of travel and meetings, an improved COVID landscape, stable economic conditions and inflationary factors, according to the latest GBTA Business Travel Index Outlook report.
The global business travel industry has rebounded at a more accelerated rate than expected just a year ago and is now expected to surpass its pre-pandemic spending level of $1.4T in 2024, the Global Business Travel Association wrote in a blog post.
The market should grow to nearly $1.8T by 2027.
Last year, global business travel spending rose 47% to $1.03T, with 32% growth expected in 2023. Those are the central findings from the latest 2023 GBTA Business Travel Index Outlook – Annual Global Report and Forecast published by the Global Business Travel Association in collaboration with Visa.
The report covers 72 countries and 44 industries. American Airlines Group (NASDAQ:AAL) rose 1.4% on Monday, Delta Air Lines (DAL) was up 0.14% and United Airlines Holdings (UAL) increased 0.23%.
“The headwinds that were anticipated to impact the rebound of global business travel over the past year didn’t materialize and that is good news,” Chief Executive Officer Suzanne Neufang said in a statement.
“This latest forecast now indicates an accelerated return to pre-pandemic spending levels sooner than anticipated as well as growth ahead in the coming years. Business travel spending is a key indicator, but how travel volumes will continue to rebound is yet to be seen.”
The two biggest drivers in the industry’s stabilization over the last six months have been the return of in-person meetings and events and the recovery of some international business travel capacity and volumes.
Western Europe was the fastest growing region globally in 2022, while North America and Latin America saw spending growth accelerate significantly in 2022.
Regionally, Asia Pacific was the big laggard last year given the delayed reopening of the Chinese economy. Chinese business travel spending fell 4.6% last year, dropping China down to the #2 business travel market in the world for the first time since 2014.
However, China is expected to recover back to being the #1 business travel market in the world by the end of 2023.