While many northern European economies in the first half of 2014 retrenched, business travel spending in Western Europe's five largest markets in 2014 is on track to grow 4.9 percent year over year to about €147.1 billion (US$186.4 billion)—the largest increase since 2010, according to a Global Business Travel Association outlook released Thursday.
Collectively, Germany, France, Italy, the United Kingdom and Spain represent nearly 70 percent of business travel spending in Europe, and therefore serve as a "good barometer of the health of the entire European business travel market," according to the report. The markets have experienced steady collective increases throughout 2014, with 4.3 percent and 4.5 percent year-over-year increases in the first and second quarters, respectively. In 2013, aggregate business travel spending in those countries increased 1 percent to $177.7 billion.
"While much of the European continent began recovering late last year, 2014 is shaping up to be a true bounce-back year for European business travel," according to GBTA.
Business travel spending in Germany remains the most robust of the five countries, totaling $14.3 billion in the second quarter, a 7.5 percent year-over-year increase. While GBTA projects Germany's business travel spending to grow 10.8 percent in 2015, the association expects only a 7.4 percent increase in 2014 due to factors including declining business confidence, falling demand for German exports and the Ukraine-Russia conflict.
The United Kingdom in Q2 had the second-highest business travel spending level at $10.7 billion, and GBTA expects such spending to grow nearly 5 percent and another 6 percent in 2014 and 2015, respectively.
GBTA revised its initial forecast of Spain's 2014 business travel spending to 6.3 percent, up from 4 percent in March. Spain came out of recession at the end of 2013 and its economy since has recorded "the fastest growth among all advanced European economies," according to the outlook. GBTA expects an additional 6.8 percent increase for Spain in 2015.
France's second-quarter business travel spending totaled $9 billion, down slightly from GBTA's March estimate of $9.1 billion. Still, GBTA estimates France's travel spending in 2014 to rise 3.3 percent year over year, and in 2015 rise 4.6 percent to $38 billion.
GBTA also revised down its initial estimate for Italy's 2014 and 2015 business travel spending after the country missed GBTA's Q2 business travel spending projection of $7.8 billion by $100 million. The association now expects business travel spending growth of 1.4 percent and 2 percent in 2014 and 2015, respectively, compared with a previously projected 2.8 percent increase for each year due to Italy's public debt, weak economy and "lack of structural and political reforms necessary for getting the economy back on its feet," according to the report.