The Global Business Travel Association (GBTA) forecasts a notable decline in business travel spending in Europe's five key business travel markets: Germany, UK, France, Spain and Italy. However, as the region works to quell its current economic woes, travel spending is expected to increase in 2013, GBTA says.
Europe's economic challenges are clearly impacting other regions, including the U.S., where the impact can be felt throughout the economy and especially in business travel, GBTA said. The reductions in business travel spend have significant implications: GBTA has found that business travel is a key economic indicator that speaks to business confidence and the future outlook for GDP growth and employment. However, as the region works to quell its current economic woes, travel spending is expected to increase in 2013, the GBTA says.
In its second GBTA BTI Outlook - Western Europe report, a semi-annual analysis of the five most critical business travel markets in Europe: Germany, the UK, France, Italy and Spain, the GBTA sees a recovery in 2013.
The five markets together form the lion's share of business travel in Europe, nearly 70 percent, GBTA says, and provide a barometer for the health of the entire European business travel market.
Highlights of the GBTA analysis include:
- Germany, France and the UK are expected to see positive GDP growth in 2012, albeit under the 1.0% level
- Interdependencies in trade, banking, and distribution have cast a shadow over the region. As such, 2012 GDP growth expectation for the Euro Area (17 country definition) has been downgraded following the Spring 2012 report to -0.4%
- Italy and Spain are currently in recession and expected to remain so until 2014
- Overall business travel spend among major European markets will fall 2.2% in 2012 to $177 billion USD before bouncing back by 1.4% in 2013
- German business travel spend is expected to rise 1.6% to hit $50.8 billion USD in 2012, before growing 3.3% in 2013
- UK business travel spend is expected to remain flat in 2012 ($40.2 billion USD) before growing 2.8% in 2013
- France business travel spend will fall -2.2% to $35.7 billion USD in 2012, before growing 1.1% in 2013
- Spain business travel spend will decline -7.8% in 2012 to $17.9 billion USD before falling another 1.6% in 2013
- Italian business travel spend will fall -6.9% in 2012 to $32.9 billion USD and will shed another -1.2% in 2013
Paul Tilstone, managing director of GBTA Europe, commented: "However, with lingering debt challenges and continued austerity measures, the European economy will likely continue to be challenged for years to come. The GBTA's fall report therefore remains cautious, with overall business travel spend forecast to increase by 1.4 percent in Western Europe in 2013."