Global business travel spending to hit record $1.18tr in 2014
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NEW YORK: Global business travel spending will reach a record $1.18 trillion this year, up nearly 7 per cent from 2013, bolstered by growth in China, a US trade group said on Monday.
The Global Business Travel Association said it expects China, where business travel spending grew to $225 billion in 2013 from $32bn in 2000, will top the United States, which is currently the world’s top individual market for business travel, by 2016.
Michael McCormick, executive director of the GBTA, said the strength of Asia in business travel reflects China’s continued emergence as a financial center. Asia-Pacific constitutes 38pc of the business travel market, compared with 21pc for North America and 24pc for Western Europe, his group said.
“The overall economy (in China) continues to grow,” McCormick said in an interview. “It’s the sheer multiplier effect that it has because there is double-digit growth in such a large market.”
In the United States, business travel spending rose 4.5pc to $274bn in 2013. China, where business travel spending rose 15pc to $225bn last year, is currently the second-biggest market. Japan was third with business travel spending of $61bn in 2013.
The group also said recovering business travel was likely to drive increases in airfares and average hotel rates, though it said fare increases would be mild should oil prices remain stable. US airlines such as Delta Air and hotel operator Starwood Hotels & Resorts last week said business travel helped fuel their quarterly profit increases.
The association cautioned that the current fighting in Ukraine was a hurdle to business activity in Russia and Europe.
“An escalating Ukrainian crisis could push Europe and Russia into recession,” the report stated.
The group added that business travel spending will keep rising over the next four years, advancing 8.6pc in 2015, 7.1pc in 2016, 6.9pc in 2017 and 6.4pc in 2018. In the last decade, the strongest years for business travel spending worldwide were 2007, which had 15.9pc growth; 2004 with 11.4pc growth; and 2006 with 9.5pc growth.
Published in Dawn, July 29th, 2014
