Noting
"growing headwinds from global trade tensions and economic uncertainty,"
the Global Business Travel Association projected 2025 global business travel
spending to increase about 6.6 percent year over year but land well shy of the
figure forecast by the association last year.
GBTA in its
annual Business Travel Index Outlook, released Monday at its annual convention
in Denver, projected 2025 global business travel spending of $1.565 trillion,
short of the $1.638 trillion
it forecast last year. Last year's BTI also overestimated the 2024 figure,
which GBTA now sets at $1.468 trillion versus last year's forecast of $1.484
trillion.
While in
nominal terms the 2024 figure was an all-time high, when adjusted for inflation
it remains 14 percent below 2019, according to GBTA.
"As we
thoughtfully anticipate reaching a new high in business travel spending this
year, the outlook is steady—but the road ahead is more complex,” GBTA CEO
Suzanne Neufang said in a statement. "Trade policy uncertainty,
inflationary pressures, and shifting global supply chains are reshaping how and
where companies travel. This latest forecast reflects the resiliency of
business travel and our industry as well as the acknowledgment of the risks ahead."
Still, GBTA
projects steady global business travel spending growth throughout the 2029, the
outer reach of its forecast. Each year's projected total through 2028 is lower
than the commensurate figure in last year's forecast, but each year's total is
projected to increase each year by at least 5.4 percent through 2029.
"The
pace and trajectory of this growth, however, will depend heavily on the
resolution—or escalation—of global trade tensions," GBTA noted in the
report.
Travel Buyer
Sentiment Shifts
GBTA’s business
travel sentiment survey of 950 business travel professionals about half of whom
were buyers reflects the larger retraction in business travel activity projected
by the BTI Outlook, and seems to go beyond it.
Released last
week, the study re-ups the sentiment survey fielded by GBTA in April to
understand the ongoing shifts in how travel buyers and suppliers see their
business travel activities, spend and revenue outlooks changing in the face of U.S.
government actions creating economic and mobility uncertainty.
Thirty-four
percent of buyers expect the number of business trips taken by company employees
will decline in 2025 versus 2024 as a result of government actions. That pessimistic
cohort is up 5 percentage points since April, when GBTA found 29 percent were
expecting trip volume declines. The percent decline against 2024 averaged 19
percent in the latest survey, versus the 21 percent pegged in April, with international
business travel more than twice as likely to be impacted than domestic or
regional travel. One third of travel buyers also expected their travel spend to
decline against 2024—by about 17 percent.
Adjustments
in meetings plans are impacting the overall travel spend and trip volumes.
Eighteen percent of global travel buyers responding to the survey say their
companies have cancelled meetings and 17 percent have cancelled events planned to
have taken place in the U.S. since the Trump administration began imposing
tariffs on U.S. trading partners and called for increased scrutiny of international
travelers as they cross U.S. borders. Thirteen percent of buyers said their
companies had relocated to another region meetings and events first planned to
take place in the U.S., while nearly a quarter had shifted some meetings or
events online.
Twenty
percent of global travel buyers responding to GBTA’s survey said they had
cancelled sending employees to U.S.-based events.
“It’s really
concerning,” Neufang told BTN. “And directionally its concerning because we are
seeing the impact of the uncertainty expand and deepen since our April survey,”
she said, noting that meetings get planned months and sometimes years in advance.
“I think what we’re seeing now is that over the last three months there’s
actually been more corporates looking at ‘can we move it?’ and ‘do we want to
send our people to those events?’ because they continue to see uncertainty and
don’t want future events to be impacted.”
Neufang
noted that both travel and meetings plans for Canadian companies continue to be
the most impacted, with more than half saying their business travel volumes and
spend would be lower and more than half confirming their companies had shifted the
location or cancelled meetings that had been originally scheduled to take place
in the U.S.
About 10 percent
of travel buyers across the board projected their travel spending would
actually increase in 2025, but not by large percentages—the average increase
across this group was about 10 percent.
With buyers’
changing projections for business travel and tracking their own current trends,
supplier sentiment has eroded regarding revenue from business travel in 2025. Forty-eight
percent of suppliers now believe business travel revenue will decrease compared
to 2024; that sentiment was particularly stark among hoteliers, among which 58
percent projected falling business travel revenues.
Falling
Business Travel Rates Portends Failure to Realize Revenue Opportunities
Falling sentiment
around business travel activity may not simply reflect trouble for the business
travel industry, but insofar as business travel supports real business needs,
it also portends an inability to convert revenue opportunities for businesses
that continue to underinvest.
That’s the
message of a third research project from GBTA T&E and the Bottom-Line:
Quantifying the Return on Investment of U.S. Business Travel, produced with
the support of the American Society of Travel Advisors and released earlier
this month.
Building on
a study produced nearly 15 years ago, GBTA partnered with Rockport Analytics,
to analyze the return on investment of business travel in an age of ongoing
virtual options and found that face-to-face engagement continues to build the
relationships and provide the on-the-ground experience that builds converts
sales and builds teams.
In the U.S.,
business travel spending converts each $1 spent to $14.60 in net operating
income, at least up to a certain threshold, beyond which the return on
investment will begin to flag. But—the research found—most companies continue
to underinvest in travel—therefore, never realizing the potential of travel as
a business tool.
Across all
U.S. industries, the current T&E investment is $294 billion, falling short
of the $319.1 billion needed to maximize profitability. That’s a $24 million or
8.3 percent gap that U.S. industry would need to bridge to achieve what GBTA
estimates would be a 6 percent increase in sales, or $2.4 trillion across all
U.S. industry.
“That may
sound like a big investment,” said Neufang, “but the payoff is considerable.
Plus, it equates to just
$184 per employee. So it's not that much [investment] when you think about it.”
A similar GBTA study
addressing business travel and revenue optimization in the UK found companies there
could unlock more than £319 billion in additional sales by increasing strategic
investment in business travel. A 9.7 percent increase in T&E spending could
yield an 8.1 percent rise in sales for UK-based companies. That equates to
about £94 additional business travel investment per employee in the UK.