Business travel spend is forecast to reach two thirds of its pre-pandemic levels by 2022, according to a new analysis by the World Travel and Tourism Council. The report, entitled “Adapting to Endemic COVID-19: The Outlook for Business Travel,” suggests that a modest increase of 26 percent in global business travel spend during 2021 will be followed by a further rise of 34 percent in 2022.
But the report, which was produced in collaboration with management consulting firm McKinsey & Company, also forecasts that the growth rate will vary across different areas of the world.
The analysis predicts the Middle East and Asia Pacific regions will lead the recovery, with business travel spending in the Middle East rising 49 percent in this year, followed by a further 32 percent increase next year. In Asia Pacific, spend will rise 32 percent in 2021 and add another 41 percent in 2022.
By contrast in the Americas, business travel spend is predicted to rise by just 14 percent this year, followed by a further 35 percent next year.
As the pandemic-related border restrictions have eased, much of the recovery in global travel has been driven by leisure spend. The subject of how to continue to reenergize the leisure sector recovery was at the top of the agenda for the WTTC Summit 2021 held this spring in Cancun.
However, according to the WTTC’s current outlook, the business travel sector is regaining momentum, as spending on business travel is set to overtake leisure spend across the Middle East, Asia Pacific, European and African regions this year.
In Europe for instance, the report forecasts business travel spend to increase by 36 percent in 2021, while leisure spend is only forecast to rise by 26 percent.
However the WTTC analysis cautions that these increases follow “a 61 percent collapse in business travel spend in 2020, following the imposition of extensive travel restrictions.”
In addition to regional difference, the report notes that certain sectors of business travel have fared better than others, “with early rebounders including manufacturing, pharmaceuticals, and construction companies while service-orientated and knowledge industries including healthcare, education, and professional services are likely to experience longer-term disruption.”
To underscore the importance of business travel for the wider travel and hospitality industry, WTTC notes that prior to the pandemic, business travel accounted for around 70 percent of all global revenue for high-end hotel chains, while between 55 and 75 percent of airline profits came from business travelers, who made up around 12 percent of passengers.
The full report can be read here.