Global business travel spending will reach a record $1.18 trillion this year, up nearly seven per cent from 2013, bolstered by growth in China, a U.S. 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 $32 billion 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 38 per cent of the business travel market, compared with 21 per cent for North America and 24 per cent 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 4.5 per cent to $274 billion in 2013. China, where business travel spending rose 15 percent to $225 billion last year, is currently the second-biggest market. Japan was third with business travel spending of $61 billion 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. U.S. 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 8.6 per cent in 2015, 7.1 per cent in 2016, 6.9 per cent in 2017 and 6.4 per cent in 2018. In the last decade, the strongest years for business travel spending worldwide were 2007, which had 15.9 percent growth; 2004 with 11.4 per cent growth; and 2006 with 9.5 per cent growth