The business travel industry has proven its resilience as it recovers from the COVID-19 pandemic and moves towards an era of post-pandemic stabilization. Forecasts for 2024 predict that global business travel spending will reach $1.48 trillion by the end of the year, an increase compared to 2019’s record $1.43 trillion. By 2028, the market is projected to exceed $2 trillion, highlighting a robust path ahead for the business travel sector in terms of spending.
Global economic stability boosts demand
The Global Business Travel Association‘s (GBTA) latest report attributes this growth to the relative stability in the global economy in addition to the lingering pent-up demand. “Many top business travel markets around the world have returned to or are nearing pre-pandemic levels, reinforcing the momentum of the recovery and boosting spending,” stated the report. However, the outlook for economic and business travel growth presents a balance of both potential upside factors and downside risks.
“We are witnessing the expected rebound in the sector, reflecting the resilience and adaptability of businesses and the value of business travel worldwide,” said Suzanne Neufang, CEO of GBTA.
Neufang added, however, that the sector must remain vigilant and adaptive to potential headwinds in this period of stabilization. Hence, factors such as changing economic conditions, technological advancements, and sustainability developments will also shape the sector ahead.
Business travel spending to surge
The report expects global business travel spending to increase 11.1 percent in 2024 after 30-47 percent rises in 2022 and 2023. GBTA expects growth to continue to gradually moderate, resulting in an annual compound growth rate of 6.95 percent from 2025 to 2028.
In 2023, the business travel industry had recovered approximately $675 billion of the $770 billion lost in 2020, achieving 93 percent of the pre-pandemic peak of $1.43 trillion by the end of 2023. The sector experienced a significant resurgence in 2023, with spending growing by 30 percent compared to 2022, reaching $1.3 trillion.
The estimated breakdown of the $1.34 trillion in 2023 business travel expenditures includes:
- $501 billion for lodging
- $282 billion for air travel
- $245 billion for food and beverage
- $165 billion for ground transportation
- $142 billion for other travel expenses
Recovery varies regionally
Recovery in business travel spending continues to vary by region. Asia Pacific emerged as the fastest-growing region in 2023 with a 36 percent growth. Following closely came Western Europe with a 33 percent expansion and North America with a 25 percent expansion.
The recovery bounce back was led in 2023 by the U.S., the Middle East, Africa and Latin America, all achieving 100 percent or more of 2019’s spending numbers.
In 2024, China and the U.S. are forecast to continue to lead as the top two markets, respectively, for overall business travel spending.
Read: Singapore Airlines passenger numbers rise 13.8 percent to 9.6 million in Q1 2024
Industry breakdown
Business travel spending also continues to vary across industries. The financial and insurance activities sector is projected to experience the most significant expansion of 72 percent in business travel spending through 2028.
Conversely, the retail trade (41 percent) and agriculture, forestry, and fishing (32 percent) sectors will likely see the least growth during this period.
Challenges remain
Despite the optimistic outlook overall, there are several factors that could impact business travel spending’s longer-term forecast. Persistent inflation, China’s slower recovery, geopolitical tensions, industry workforce challenges, and incidence of natural disasters could impact the sector’s outlook.
In addition, the rising focus on corporate sustainability also has the potential to impact the sector, demonstrating the vital importance of coordinated action across the industry for business travel’s future.
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