Business Travel Spending Is Coming Back, but More Slowly than Predicted

Photo Source: Global Business Travel Association

Unfortunately, the travel industry isn’t escaping the same issues that are plaguing many industries across the globe right now— inflation, energy prices, supply chain challenges, labor shortages and more. The uncertainty surrounding these critical aspects of the global economy is slowing the recovery that was predicted to reach pre-pandemic levels 18 months earlier.

The global business travel industry continues to progress toward full recovery to 2019 pre-pandemic spending levels of $1.4 trillion, according to the “2022 GBTA Business Travel Index Outlook,” an annual global report and forecast published by Global Business Travel Association (GBTA) and sponsored by Mastercard. But that recovery has hit some headwinds. Just as many COVID-19-related recovery conditions have improved, many macroeconomic conditions deteriorated rapidly in early 2022. These new developments are impacting the timing, trajectory and pace of business travel’s recovery, both globally and by region, pushing the forecast for full recovery into 2026 instead of 2024 as previously forecasted.

“To understand the headwinds that have been impacting a more accelerated recovery for global business travel, all you have to do is look at the news headlines since the beginning of 2022. The factors impacting many industries around the world are also anticipated to impact global business travel recovery into 2025. The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026,” explains Suzanne Neufang, CEO of GBTA.

The exhaustive study of business travel spending and growth covers 73 countries and 44 industries. Now in its 14th edition, this latest report outlines a top-level outlook for global business travel from 2022 to 2026. Highlights include:

• Total spending on global business travel reached $697 billion in 2021, 5.5% above the pandemic-era low of 2020. Last year was nearly as challenging as 2020 for the global business travel industry, as it sought to carve out a “normal” following the COVID-19 pandemic. The industry gained back roughly $36 billion of the $770 billion lost in 2020.
• Recovery was short-circuited by the Omicron variant and spike in global COVID-19 cases in late 2021 and early 2022. As case numbers began to retreat, business travel surged. Global business travel spending in 2022 is expected to advance 34% over 2021 levels to $933 billion, recovering to 65% of pre-pandemic levels.
• Recovery in 2022 was dependent upon, and has been largely driven by, improvement in the four factors of global business travel recovery — the global vaccination effort, national travel policies, business traveler sentiment and travel management policy — where conditions have improved significantly in the last six months.
• Deteriorating economic conditions and shifting secular trends in 2022, however, have slowed global recovery. Hence, global business travel will almost reach pre-pandemic levels in 2025, reaching $1.39 trillion.
• Global spending is not expected to make it fully back to the $1.4 trillion dollar mark until mid-2026, when it is forecast to reach $1.47 trillion dollars. This adds an estimated 18 months to the industry’s recovery than was forecast in the previous GBTA Business Travel Index released in November 2021.
• The 2022 report finds the biggest obstacles to more accelerated recovery in global business travel are persistent inflation, high energy prices, severe supply chain challenges and labor shortages, a significant economic slowdown and lockdowns in China, and major regional impacts due to the war in Ukraine, as well as emerging sustainability considerations.