Business travel recovery at ‘slower, more cautionary pace’, but spending expected to surge in 2022

23 November, 2021

Business travel recovery in 2021 proceeded at a slower, more cautionary pace than expected from a year ago. However, global business travel spending is expected to surge in 2022 with full recovery expected in 2024–ending the year on pace with the 2019 pre-pandemic spend of USD1.4 trillion, and a year sooner than previously forecast, projects the latest BTI Outlook business travel index from the Global Business Travel Association (GBTA).  

The 13th edition of the report, which provides a detailed analysis of business travel in 2021 with projections for 2022 and beyond, including post-COVID-19 recovery forecasts. It notes positively that global business travel activity has begun its rebound from the sharp downturn brought about by the COVID-19 pandemic.

After declining -53.8% in 2020 to USD661 billion, global expenditures are expected to have rebounded +14% in 2021 to USD754 billion. This was more slowly than forecast in GBTA’s previous BTI Outlook report issued in Feb-2021. But, despite this recovery setback, a year-over-year surge of +38% is projected for 2022 as “recovery and pent-up demand kicks into a higher gear”, bringing global business travel spending back to over USD1 trillion.

Recovery will continue into 2023, with global spending rising +23% year-over-year as even more international and group travel comes back online and, according to the BTI Outlook, by 2024, global business travel is forecast to have made a full recovery, ending the year at USD1.48 trillion, just above the 2019 pre-pandemic spend of USD1.4 trillion.

In 2025, global business travel growth will continue, but is forecast to slow to +4.3% – just below the 10-year average growth rate of +5.1% coming into 2020 – ending the year at a forecasted USD1.5 trillion.

A brighter view, but clouds remain on the horizon

It is certainly an encouraging outlook. However, persistent COVID-related threats and disruptions, supply chain strains, labour shortages, rising inflation, increased costs, and lagging recovery in Asian markets are just a few of the risks GBTA suggests could influence the recovery timescale.

Additionally, yet to be determined are the potential impacts of emerging factors including broad adoption of remote working models, long term cuts or elimination of business trips and travel volume, and the increased focus on sustainability practices and policies for business travel, it acknowledges.

“The business travel industry recognises there are factors, related to COVID-19 and beyond, that could impact the road ahead over the coming years,” warns Suzanne Neufang, CEO for GBTA. “However, there is optimism overall as the industry, companies and travellers worldwide lean into recovery and the much-needed return to business travel.”

Business travel recovery ‘hit a fair number of bumps’ in 2021

The BTI Outlook shows that the global business travel recovery that began in late 2020 “hit a fair number of bumps” in 2021. Pandemic surges, variant introductions, uneven vaccination rates, and mounting supply chain challenges all took their toll on previously forecast growth expectations.

Its analysis indicates that North America has led the recovery, the US in particular, rebounding +27% in 2021. Business travel markets in Latin America, Middle East and Africa (MEA) and Asia-Pacific (APAC) all picked up +15% to +20% growth in 2021 too. However, European markets have lagged in 2021.

Emerging Europe is expected to gain only +10% and for the region of Western Europe, business travel expenditures for 2021 are expected to fall -3.8% from 2020 levels, estimates the report. This, it says, stems from “early year underperformance”, but with “recent resurgence” it indicates that business travel demand in the region could now outpace most other parts of the world, barring any COVID-related setbacks.

Elsewhere, recovery in Asia Pacific has been slower, “due to lagging border re-openings and a high dependence on international business travel”, while business travel in Latin America is performing relatively better in terms of percentages, but rising public debt and interest rates, declining credit ratings, and lower vaccination rates are outlined as potential future threats for Latin American business travel.

Business travel recovery will also vary by industry. Professional and business services and real estate have been “resilient to date”, explains the BTI Outlook, while wholesale trade “has been challenged”. Accommodation and food services, arts, entertainment and recreation, and retail trade, which were significantly impacted during the pandemic, are expected to recover sharply over the forecast period, it projects.

Business travellers appear ready and willing

Among 400 global business travellers polled in the BTI Outlook, more than four in five (86%) report that they need travel to accomplish their business goals. A majority (81%) believe that their volume of domestic business travel will be greater or on par in 2022 than it was prior to the pandemic.

Over half (54%) miss travelling and hope to travel more often in the future. However, 43% wouldn’t mind travelling less in the future, whether they indicated they miss it or not. Four in five (81%) of business travellers say their company now requires vaccines for travel and in-person meetings.

CFOs see ‘better’ or ‘much better’ economical environment

In a poll of 40 CFOs across North America, Latin America, Asia-Pacific and Europe within the BTI Outlook, more than two thirds (70%) felt in 2022 the overall economy in their country would be better or much better than in 2021. Around half (52%) reported they expect their company’s business travel spend to reach 2019 levels in 2022.

When asked about the importance of business travel for their company, CFOs felt the top return-on-investment reasons for business travel are sales and business development (68%), internal business planning and strategy (50%), client account management (48%) and employee training and development (48%).

Vaccinations, travel policy, sentiment will continue to influence recovery

The BTI Outlook outlines four conditions necessary for full recovery in global business travel: the global vaccination effort; national travel policy; business traveller sentiment; and  corporate travel management policy.

The recovery remains “highly dependent” on the vaccine rollout, employees’ return to the office, and a normalisation of travel policies on both the national and corporate levels, it says. This will mean that travel managers will still – and increasingly –  face the challenge of juggling duty of care with rising costs, sustainability priorities, and new considerations on the ROI of business travel.