Global business travel forecast 2019
As the Summer ends, it’s often the time when organisations turn their attention to the year ahead and start to plan their business forecasts. This is an opportunity to review the figures over the last year and invest time to create, manage and prepare business plans and budgets for the year ahead. Companies best prepared for the future are those that track key variables and most accurately forecast industry trends. Assessing the impact and potential opportunities such as new technologies and new markets, and the potential cost of delivery is a vital part of your future success. So how do you predict your travel costs, traditionally the largest expense item for organisations?
The business travel outlook
Spending on business travel related activity totalled $1.3 trillion globally in 2017. This was a 5.8% increase on 2016 levels according to the GBTA BTI™ Outlook – Annual Global Report & Forecast; and Spending is forecast to advance another 7.1 percent in 2018 growing to $1.7 trillion by 2022.
According to the same report, the recent growth in business travel could indicate an end to the “era of uncertainty” in Global business travel. The current surge in travel spend coincides with global economic expansion that emerged in 2016 following the development in key and new economies. 15 of the top 20 global business travel markets grew above average in 2017, for the first time in five years.
In Western Europe, business travellers generated $310 billion in total business travel spending in 2017, a 4% increase over 2016 levels including 5.6 % in Germany, 3.9% in France and 6.3 % in Spain. The only market bucking this trend was the UK, which reportedly declined -0.7% last year. The decline in Britain is thought to be driven by the fallout from the Brexit vote and the impact on the pound, inflation and consumer spending.
Moving into 2019 GBTA BTI™ Outlook projects moderate to strong growth in Western Europe with Germany, France and Spain all growing their business travel markets between 4-6 %. The UK however is less predictable, as the health of the market will hinge on the final terms of Brexit negotiations.
With projected growth in business travel what impact does this have on fares?
According to BCD Industry Forecast 2019 airfares are set to rise 1% globally and hotels rates will increase between 1-3%. Closer to home, Europe are predicted to see regional fares increase by 2% and intercontinental fares by just 1% due to strong competition.
Whilst the outlook looks positive, arguably the biggest unknown as we enter the next financial year is around trade policy. The protracted negotiations around Brexit have done nothing to fuel business travel causing uncertainty and stalling recovery, the US imposed trade tariffs on imported items is set to continue, causing other markets to retaliate and more uncertainty – All factors which makes forecasting particularly tricky!