The Global Business Travel Association projects business travel spending this year will increase year over year in all five of Western Europe's largest markets—Germany, the United Kingdom, France, Spain and Italy—for the first time since 2010.
Combined business travel spending in those five markets increased in 2013 by just under 1 percent year over year, according to estimates in the GBTA Foundation's Western Europe outlook, released on Thursday. However, spending increased only in the United Kingdom and Germany, decreasing in the other three countries.
Improving economic conditions should turn those markets around this year.
"Growth will first develop in the export sector and then quickly diffuse to consumer and business spending," according to the outlook. "Meanwhile, the government sector will offer little recovery help given the focus on fiscal rebalancing."
Business travel spending in Germany, where the economy is "one of the most robust in all of Europe," in 2013 increased by 6 percent year over year and this year should increase by another 7 percent, according to GBTA. As recovery in the rest of Europe picks up the pace next year, the association projects German business travel spending in 2015 will increase 10.6 percent, "an unprecedented rate for a market as developed as Germany's."
In the United Kingdom, business travel last year increased by almost 2 percent, according to the report. With U.K.-based firms generally optimistic about growing their business during the next few years, GBTA projects the country's business travel spending will increase 4.4 percent this year and 5.1 percent next year.
Business travel in France in 2013 decreased slightly (0.2 percent) year over year, according to GBTA estimates, although domestic business travel spending was up 1.6 percent. The association projects business travel spending levels in France have "bottomed" and will increase 5.4 percent this year and another 5.5 percent in 2015.
The country is facing a few risks in that growth, however.
"There is a large amount of uncertainty in the future of France's economic policy," according to the report. "It's unlikely that France will continue to compete in the global economy without significant reform to labor markets, pensions, taxes and social benefits."
In Spain, where the economy has been "one of the weakest in the developed world over the last couple of years," business travel spending levels in 2013 dropped by an estimated 5 percent, according to GBTA. Its economy should begin to turn around this year, however, and business travel spending as a result should increase 4 percent in 2014 and 5 percent in 2015, the report stated.
Like Spain, Italy's economy has contracted for 10 quarters in a row, and business travel spending there in 2013 decreased an estimated 4.1 percent year over year, GBTA reported. The organization projects that the current quarter will be the last in Italy's run of business travel spending declines, with spending beginning to pick up in the second quarter. For the full year of 2014, GBTA projects Italian business travel spending will increase 2.8 percent year over year and again by the same rate in 2015.
Despite the overall positive forecast for this year, GBTA cautioned that the forecast still faces a number of risks, including the sovereign debt crisis, a sudden change in oil prices due to disruptions from the Middle East and currently slowing rates of inflation changing to deflation.