The latest Global Business Travel Association (GBTA) BTI Outlook – Western Europe has found that business travel spending in 2014 among the five key markets is expected to reach US$183bn, which represents a 3.3 per cent growth over 2013. This projected gain would be the largest in Western Europe since the Great Recession. Germany, the UK, France, Italy and Spain form the lion’s share of business travel in the region (70%) and act as a good barometer of the health of the entire European business travel market.
Key highlights of the report include:
- Germany remains the largest business travel market in Europe reaching a value of $50.5bn in 2012. This is expected to increase by 5% in 2013
- The UK has the second highest worth in Western Europe with $40.6bn in 2012 and is expected to advance 1.6%
- In 2013, domestic business travel will fare better than international outbound in all five markets except for the UK.
“After six consecutive quarters of decline, Europe has finally turned the corner,” says the Regional Director for Europe at GBTA, Catherine McGavock. “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. Next year we can expect to see the largest annual growth in business travel spending in more than six years.”
The GBTA BTI Outlook – Western Europe 2013 tracks business travel spending in total and by domestic and outbound segments. It relates unfolding economic events at home and abroad to their resulting impacts on Europe’s business travel markets.
North/south divide still evident
Economic growth remains a two-speed story with the Northern European markets showing positive growth, but not yet enough to compensate for the negative performance of the Southern tier.
Last year proved to be challenging for the Western European economy and for business travel. Business travel policies were tightened and budgets reduced or frozen. Total travel spend across all five key markets combined to register a decline of 2.2 per cent in 2012, to $177.4bn. However, while Germany and the UK eked out small positive growth rates for the year, negative performance in Italy, Spain and France overwhelmed the slight growth in the North.
The Southern countries are expected to continue to decline for the remainder of the year and into early 2014, but with Germany and the UK gathering momentum, the region will see a return to growth in 2014. The GBTA Foundation expects travel spending to be essentially flat in 2013 then rise by 3.4% the following year.
Eurozone corporate profits
Business travel is closely tied to corporate profit performance, another indicator that is beginning to turn around in Europe. Corporate profits in Northern tier countries are beginning to show growth over year-ago levels.
The expectation for the rest of 2013 and 2014 is for operating surpluses to stabilise and begin to improve, driven finally by some top-line revenue growth to combine with cost-cutting programmes that have been in force since 2011. All of this bodes well for both domestic and overseas business travel.
Germany
- GBTA forecasts growth in total spending to hit 5% in 2013
- Spending on domestic business travel is expected to end the year up 5.7% over 2012. Even more growth is in store in 2014 as domestic spending is projected to surge 7.7% to $46.4bn.
United Kingdom
- GBTA expects total business travel spending to hit $41.3bn in 2013, up 1.6% from 2012
- International outbound business travel is likely to outperform domestic spending in 2013, but this will reverse in 2014, due to exchange rate effects.
France
- GBTA forecasts total spending to fall by -2.3% in 2013 to $34.9bn. Business travel spending will see small gains in 2014, expanding by 2.7% to $35.8bn.
- Domestic business travel spending continues to stagnate in 2013 with annual growth of 0.3%. 2014 is expected to be a much better year for domestic business travel in France.
Spain
- Business travel spending is set to decrease in 2013 Q2 – its ninth straight quarter of decline, falling -6.7%
- Both domestic and international outbound business travel will see significant declines in 2013.
Italy
- Expects a spending loss amounting to -3.9% in 2013 with total spending gains for 2014 projected at 1.2%
- Spending on international outbound business travel will fall -7.2% in 2013 and another -0.3% in 2014.
This was first published in issue 74 of CMW. Any comments? Email cmw@mashmedia.net
