Worldwide business travel spending looks set to rise by more than a quarter this year and reach two thirds of pre-pandemic levels by 2022, according to the World Travel & Tourism Council (WTTC).
The forecast comes in a major new WTTC report in collaboration with McKinsey & Company called ‘Adapting to Endemic Covid-19: The Outlook for Business Travel’.
Business travel was disproportionately affected by the Covid-19 pandemic and has been slower to resume, the WTTC highlights.
According to the new report, the modest boost for business travel with global business travel spend rising 26 percent this year will be followed by a further rise of 34 percent in 2022.
“But this comes in the wake of a 61 percent collapse in business travel spend in 2020, following the imposition of extensive travel restrictions with considerable regional differences in the bounce back around the world,” the WTTC says.
To speed up the recovery of business travel, the report recommends that businesses adjust their revenue models, expand geographic focus, and improve digital services.
“Business travel has been seriously hit but our research shows room for optimism with Asia Pacific and Middle East first off the starting blocks,” WTTC CEO & President Julia Simpson said.
Considering this year and next, WTTC data shows which regions around the world are leading the revival in business travel, led by the Middle East:
- Middle East – Business spending is set to rise by 49 percent this year, stronger than leisure spending at 36 percent, followed by a 32 percent rise next year
- Asia-Pacific – Business spending is set to rise by 32 percent this year, and 41 percent next year
- Europe – Set to rise by 36 percent this year, stronger than leisure spending at 26 percent, followed by a 28 percent rise next year
- Africa – Spending is set to rise by 36 percent this year, slightly stronger than leisure spending at 35 percent, followed by a 23 percent rise next year
- Americas – Business spending is expected to rise by 14 percent this year, and by 35 percent in 2022.
The report details how global travel-related spending declined significantly from 2019 to 2020, as a result of Covid-19 and the ongoing restrictions to international mobility.
WTTC’s report also shows significant changes over the past 18 months, particularly in demand, supply, and the overall operating environment which affect business travel.
Moreover, it emphasises the continuing importance of business travel and the spend it generates for global economic growth.
According to analysis, in 2019 most major countries depended on business travel for 20 percent of their tourism, 75 to 85 percent of which was domestic.
Although business travel represented only 21.4 percent of global travel in 2019, it was responsible for the highest spending in many destinations, making it essential for the recovery of the entire travel sector and for its many stakeholders.
Airlines & hotels
In addition, business travel is an important part of the service offering for airlines and high-end hotels and essential for generating much of their revenues.
Before the pandemic, business travel accounted for around 70 percent of all global revenue for high-end hotel chains while between 55 and 75 percent of airline profits came from business travellers, who made up around 12 percent of passengers.
WTTC believes while business travel will return, its uneven recovery will have important implications across the global Travel & Tourism sector, making private public partnerships even more important in the months and years ahead.
The report can be found here: https://research.wttc.org/business_travel_outlook_2021