The new markets driving the growth in business travel
Globalisation is a continuing force, driving the economy as the promise of profit and untapped markets continue to lure business people and investment overseas. More and more, emerging markets are appearing following investment in their infrastructure, economic reform and the formations of new partnerships to drive their transformation.
GBTA BTI™ Outlook – Annual Global Report & Forecast projects that emerging “gazelle” markets including Brazil, China, India and Russia will show a GDP growth of 4.8% between 2018-2021 and that India is projected to crack the top 5 Global markets by 2022. This is perhaps unsurprising given that India was the only country to make a difference to the top 15 business travel markets 2017-2018, surpassing South Korea to take seventh place.
The performance in emerging markets has been a key determinate in the overall health of the global business travel environment with India and Indonesia predicted as the fastest growing markets. India remains the fastest growing economy and has made great strides over the last five years, its economy, and dominant services sector, are on a high-growth trajectory. Legal challenges and commercial disputes exist in the business environment, but for western companies with a truly global strategy, it presents significant opportunity. Likewise, Indian businesses are looking west for profitable partnerships.
Annual Business travel spend in India increased by 12.5% in 2017, reaching $37.1 billion, a trend set to continue with expected annual spend to reach $63.5billion by 2022 and surpassing the size of both the UK and France. So, where is this increase coming from?
Research shows that industries leading the change include Education, Human Health and Social Work Activities, Real Estate Activities, Administrative and Support Service Activities, Public Administration and Defence, Accommodation and Food Service Activities, Transportation & Warehousing, and Utilities. Interestingly all are expected to exceed 11% in annual growth between 2018 and 2022. This is a country on the up and if you haven’t already it’s time to engage!
Indonesia is the other market continuing to show enormous growth potential. The largest economy in South East Asia, Indonesia’s economy continues to exhibit great potential with annual GDP growth of approximately 5% and emerging markets in mining, manufacturing, infrastructure, automotive and consumer goods. As per any growing market the continued growth will be reliant on the country’s ability to modernize infrastructure, improving education and streamline bureaucratic processes.
Despite the slowdown in China’s economy, the Chinese business travel market is poised to be the 5th fastest-growing market in the world over the next five years, picking up an additional $129 billion in annual business travel spend by 2022. It remains the biggest business travel market in the World having surpassed the United States in 2015.
Together these three countries – India, China, and Indonesia, represent a total market opportunity of $401 billion USD and continues to grow at an extremely rapid pace picking up business from more established economies such as the US and Western Europe. And while opportunities abound in these burgeoning business markets, travel managers must keep the safety of their employees firmly at front-of-mind. A robust risk management policy and supporting technology to include health and safety alerts, travel tracking and location alerts will be even more necessary.