China is set to surpass the United States as the biggest business travel spender in the world by 2016 despite increasing concerns about an economic slowdown.
While Chinese President Xi Jinping was calling on government officials in Beijing to focus on economic reforms, the Global Business Travel Association (GBTA) was reporting that the country’s total travel spend had leapt from $32 billion at the turn of the millennium to $225 billion last year, equating to 16.3% average annual growth.
By comparison, the US saw an average of only 1.1% per annum growth throughout the same period of time.
Of all the world’s regions, Asia Pacific is spending most on business travel, commanding around 38% global share of spend. In second place Western Europe has 24% share, just ahead of North America at 21%.
The other nations that make up the Bric quartet, Brasil, India and Russia, all continue to grow the amount they spend on travelling to win new business.
Michael McCormack, the GBTA’s executive director and chief operating officer said: “The report underscores that China, along with the other Bric countries, is turning business travel expenditure into more economic opportunities and we expect to see this shift in business travel spending to continue.”
The GBTA BTI business travel spend forecast, published at the organisation’s convention in Los Angeles this week, expects the gap between east and west to further widen by 2018. Asia Pacific will gain 5% more share of total global spend while North America and Europe will slip back 3% each.
Globally the report says 2014 will be the best year for the amount companies and organisations spend on business travel since the economic crisis in late 2008. A record $1.2 trillion will have been spent on travel and related services by December 31, a 6.9% rise on 2013.
Meanwhile, geo-political tension and instability in Ukraine and Crimea are hampering the growth of business travel in the emerging economies of Eastern Europe. The study’s authors warn that Europe and Russia could be pushed into recession if the crisis is not averted in the short term.
The GBTA expects business travel spend in Russia, where until recently Moscow was one of the world’s fastest growing commercial hubs, will fall by 5% year on year by the end of 2014.
On a more positive note, oil prices have managed to remain relatively stable at around $100 per barrel for the last three years in spite of escalating tensions, which is good news for airlines and customers.
However, the GBTA report does urge travel buyers and the international business travel community to be cautious and prepared for any unexpected rises.