Beware the Headwinds: Business Travel Spending on Track to Recover by 2026 Only
The worldwide corporate travel sector is making headway towards reaching pre-pandemic 2019 spending levels of USD $1.4 trillion, but the recovery has encountered significant challenges. In early 2022, several macroeconomic conditions deteriorated quickly, even as many recovery metrics relating to Covid have improved. The timing, trajectory, and rate of the global and regional business travel recovery are being impacted by these new events, delaying the prediction for full rebounding until 2026 rather than the earlier anticipated 2024. These are the main findings outlined by the recent 2022 GBTA Business Travel Index Outlook – Annual Global Report and Forecast.
The good news is that a total of $697 billion was spent on global business travel last year, a 5.5% increase over 2020. As such, the industry recovered roughly $36 billion of the $770 billion lost in 2020.
Nevertheless, recovery was cut short by the Omicron variant and a rapid surge in global Covid cases in late 2021 and early this year. Business travel found its way back into the public’s lives as case numbers plummeted.
2022 is supposed to see global business travel spending overshoot the 2021 levels by a third, hitting $933 billion and getting back to 65% of pre-pandemic levels.
Significant gains in four meaningful areas – the global vaccination drive, national travel regulations, business traveler sentiment, and travel management policy – pushed the recovery forward in 2022.
The updated forecast claims that global spending is to get back to the pre-pandemic levels in mid-2026 when it is supposed to reach $1.47 trillion. This extends the industry’s recovery timeframe by 18 months compared to the previous GBTA Business Travel Index released in November 2021.
The 2022 BTI posits the biggest challenges to swifter recovery in global business travel are elevated inflation, increasing energy prices, major supply chain obstacles, and labor shortages, a noticeable economic slowdown and lockdowns in China, and severe regional impacts caused by the war in Ukraine coupled with rapidly evolving sustainability considerations.
In July 2022, GBTA surveyed over 400 frequent business travelers and nearly fifty executive travel budget decision makers across the world. The overall sentiment is positive, but it also looks like Covid concerns are stepping back to give way to the current macroeconomic and geopolitical issues.