Business travel spending in Western Europe this year will roughly
equal 2012 levels but in 2014 will experience its largest year-over-year increase
"since the Great Recession," according to a new Rockport Analytics
report commissioned by the Global Business Travel Association and Visa. Business
travel spending in the region—comprised of France, Germany, Italy, Spain and
the United Kingdom—this year will decline 0.1 percent but in 2014 will increase
3.4 percent to $183 billion, according to the report. Those five countries
represented 68 percent of all 2012 business travel spending in Europe.
"After six consecutive quarters of decline, Europe has
finally turned the corner," GBTA European regional director Catherine
McGavock noted in the report. "Challenges remain, but we cannot ignore the
economic progress that has been made and the impact that this will have on both
domestic and international travel across Western Europe."
Germany, the largest market in the region, is predicted to
have the highest 2013 business travel spending increase at 5 percent to $53
billion, followed by a 6.1 percent rise in 2014. In the United Kingdom,
business travel spending is expected to increase 1.6 percent to $41.3 billion
by the end of the year, with a 2.9 percent increase in 2014.
In France, Italy and Spain, however, business travel
spending this year is expected to contract, according to the report. The highest
decline is expected in Spain (6.7 percent), followed by Italy and France at 3.9
percent and 2.3 percent, respectively.
GBTA attributed Europe's current economic state to several
factors including "depressed demand, weak credit markets, fragile bank
balance sheets, a sluggish export environment and a flagging confidence."
As business travel is closely tied to corporate performance,
Germany's economy and the financial performance of its corporations
outperformed its European counterparts, boosting business travel spending there,
according to the report.
"European economic growth remains a two-speed story
with Northern ‘core' markets showing meager positive growth that has not yet
been enough to compensate for the still-negative performance of the Southern
Tier," according to the report.
By 2014, however, GBTA predicts the three southern countries
to rebound with modest increases in business travel spending. Such spending in France
in 2014 is expected to rise 2.7 percent from this year's level to $35.8 billion,
while increasing 1.6 percent in Spain to $17 billion and 1.2 percent in Italy.
To create the report, Rockport developed a model measuring
business travel spending sourced from GBTA research and other measures,
including gross domestic product, employment and unemployment figures, business
and consumer confidence, commodity and oil prices, inflation measures,
International Air Transport Association passenger and revenue performance,
exchange rates and other data.