|Photo by Freeimages.com/Vince Varga|
Western Europe’s business travel spending is projected to increase to $211.2 billion in 2016 and top out at $225.6 billion in 2017, 6.3 percent and 6.8 percent growth respectively. Those figures are among the key findings in the most recent GBTA BTI Outlook – Western Europe report, conducted by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), and sponsored by Visa, Inc.
The GBTA BTI Outlook – Western Europe report looks at the five largest business travel markets in Europe: Germany, the United Kingdom, France, Italy and Spain that together make up 70 percent of Western Europe’s business travel market, and serve as a strong indicator for the European business travel market more broadly. Taken together, the business travel trends of these five countries demonstrate that Western Europe’s business travel confidence and demand is growing due to a number of positive factors that are projected to continue into next year, the GBTA said.
“What’s most impressive about these results is that Europe has faced a seemingly endless array of challenges recently,” said Catherine McGavock, GBTA’s regional vice president – EMEA. “From the Greek debt crisis to the influx of Syrian refugees, terrorist attacks in several European capitals, and the pending UK referendum on possibly exiting the bloc, the business travel market has not only endured, but thrived – growing at a greater rate over the last year than many of the other large business travel markets across the globe.”
Business Travel Growth in Northern and Southern Europe
Europe’s positive business travel growth will continue at a respectable rate, and that growth is not confined to the continent’s larger, northern economies. Europe’s southern tier is also faring better than expected with an improved outlook as consumer confidence returns and a favorable business climate promulgated by low interest rates and oil prices and rising demand and investment continue, the GBTA said. Italy and Spain, for example, will see growth rates of 7.3 percent and 11.9 percent, respectively, from 2015 to 2017.
A “Brexit” Effect?
On 23 June, UK voters will vote on whether or not to exit the European Union. Most polls show that the referendum will not pass and the UK will stay in the European Union. Even if voters in the UK do decide to vote for “Brexit,” given the overall size of the EU economy relative to UK, it is likely that the fallout should be manageable for both sides. There are specific European countries that are very closely aligned with the U.K. economy, however, where the impact would be more significant, such as Ireland, the GBTA said.
For individual business travelers, perhaps the biggest effect the Brexit would have is on the ease with which they could travel to and from the United Kingdom. As a European Union member, travel is currently unrestricted within the bloc, making business travel across borders much easier than it had been previously. Perhaps the greatest risk of Brexit is the inspiration it may provide to other countries to test membership, calling into question the existence of the Union. The financial, economic and cultural upheaval from that extreme shift could be significant.
Despite the looming Brexit referendum, refugee crisis and continuing global economic uncertainty, Western Europe’s business travel market is robust – and serves as a harbinger of positive growth and more consumer and business confidence in the coming months and years ahead, the GBTA said.
Country-Level Business Travel Outlooks
Germany – a $63.5 billion market – is leading the way, with business travel growth of 7.6 percent projected in 2016 and 9.3 percent growth in 2017. Spending on domestic business travel is increasing by 7.1 percent this year and projected to increase by 9.3 percent next year. International outbound business travel will grow 9.8 percent in 2016 and 9.5 percent in 2017. Domestic business travel accounts for 80 percent of all business travel in Germany.
The United Kingdom – a $47.1 billion market – is expected to grow at 7.9 percent in 2016 and 6.9 percent in 2017. Spending on domestic business travel will grow at 6.9 percent in 2016 and 5.8 percent in 2017, while international outbound travel will grow at 9.8 percent in 2016 and 8.9 percent in 2017. Domestic business travel accounts for 65 percent of all business travel in the United Kingdom.
France – a $37.1 billion market – is expected grow at 3.9 percent in 2016 and 5.8 percent in 2017. Spending on domestic business travel will grow at 3.0 percent this year and 5.7 percent next year, while international outbound travel will grow at 5.6 percent in 2016 and 6.1 percent in 2017. Domestic business travel accounts for 65 percent of all business travel in France.
Spain – a $19.4 billion market – is expected to grow at 6.5 percent in 2016 and 5.1 percent in 2017. Spending on domestic business travel will grow at 7.0 percent in 2016 and 4.3 percent in 2017, while international outbound travel will grow at 4.7 percent in 2016 and 7.9 percent in 2017. Domestic business travel accounts for almost 80 percent of all business travel in Spain.
Italy – a $31.6 billion market – is expected to grow at 3.6 percent in 2016 and 3.5 percent in 2017. Spending on domestic business travel will grow at 3.0 percent this year and 3.4 percent next year. International outbound travel will grow at 8.4 percent in 2016 and 4.4 percent in 2017. Domestic business travel accounts for almost 90 percent of all business travel in Italy.