The Global Business Travel Association (GBTA) has pushed back its forecast of a full recovery in corporate travel spending by 18 months to mid-2026.
The latest GBTA Business Travel Index, released today at the GBTA Convention in San Diego, predicts inflation, high energy prices, supply chain issues and labour shortages will add 18 months to the time it takes the sector to recover to the pre-pandemic spending level of $1.4 trillion in 2019.
The Business Travel Index notes “many macroeconomic conditions deteriorated rapidly in early 2022” despite the easing of Covid-19 travel restrictions.
The annual forecast, produced by GBTA in partnership with Mastercard, pushes back the previous forecast of a full recovery by 2024 issued in November 2021.
GBTA chief executive Suzanne Neufang said: “The headwinds since the beginning of 2022 impacting many industries around the world are anticipated to impact the global business travel recovery.
“The result is we won’t reach and exceed 2019’s levels until 2026.”
The latest index notes global spending on business travel reached $697 billion in 2021, 5.5% above the low of 2020.
It forecasts spending will reach $933 billion this year or two-thirds (65%) of the pre-pandemic level after the recovery was “short-circuited” by the Omicron variant and spike in global Covid cases in late 2021 and early 2022.
The index identifies persistent inflation, high energy prices, severe supply chain challenges and labour shortages as the major obstacles to a faster recovery, heightened by the economic slowdown and lockdowns in China and the war in Ukraine as well as “emerging sustainability considerations”.
It suggests the pace of recovery will continue to vary significantly from one region to another.
The index notes North America led the recovery in 2021, driven by rapidly returning domestic travel, while Western Europe saw spending decline last year due to Covid travel restrictions.
Both regions are forecast to see sharp recoveries, with spending to reach $364 billion in North America by 2026 and $324 billion in Europe.
Spending in the Asia Pacific region, where China led the recovery in 2021, is forecast to return to two-thirds (66%) of pre-pandemic levels by the end of 2022 after the recovery went into reverse due to China’s zero-Covid policy and widespread lockdowns.
By contrast, spending in Latin America is forecast to reach 83% of pre-pandemic totals despite the slower start to vaccination efforts in the region in 2021.
GBTA forecasts global spending will almost return to pre-pandemic levels by 2025, reaching $1.39 trillion, but will not reach $1.4 trillion over a 12-month period until mid-2026.