Travel spend to fall in Europe in 2012

20 September 2012

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20 September 2012 | Anna Reynolds

Overall business travel spend across Western Europe will fall in 2012 due to a lack of job growth and continuing economic uncertainty, according to the Global Business Travel Association (GBTA).

The GBTA has forecast an overall drop in business travel spend by 2.2 per cent to $177 billion (£109 billion) in 2012 but it expects this to bounce back by 1.4 per cent in 2013.

The reason for this lies with Italy and Spain being in recession, a situation expected to continue until 2014. The report reveals Spanish business travel spend will fall by 7.8 per cent in 2012 with Italy dropping by 6.9 per cent. Business travel in France is also expected to suffer, falling by 2.2 per cent in 2012 with a slow recovery in 2013 of 1.1 per cent.

The report highlighted a strong correlation between job growth and travel spend, as Germany is the only European country that has succeeded in bringing down unemployment over recent years. In comparison, Spain’s unemployment rate has risen to almost 25 per cent.

Paul Tilstone, managing director of GBTA Europe, said: “With lingering debt challenges and continued austerity measures, the European economy will likely continue to be challenged for years to come. The GBTA’s fall report therefore remains cautious, with overall business travel spend forecast to increase by 1.4 per cent in Western Europe in 2013.”

Germany showed the biggest growth, with an increase in business travel spend by 1.6 per cent in 2012 and a further 3.3 per cent in 2013 to $52.5 billion (£33 billion). The reason for this is strong industrial and service sectors and a number of large commercial hubs including Berlin and Munich.

The report also identified that overall, the UK has the second-highest level of spending on business travel in Western Europe, with $40.2 billion (£25 billion) in 2011. But 2012 figures for the UK are expected to remain flat before growing by 2.8 per cent in 2013.

The highest proportion of UK spending was on international business travel (35 per cent of total spend in 2011), due to the UK maintaining a large volume of trade on the European continent. Results also found international business travel spend and exports often correlate with each other.

The report is the second of the GBTA’s studies this year looking into business travel spend in Western Europe, including Germany, the UK, France, Italy and Spain. Together these markets form nearly 70 per cent of the total European business travel market.

☛ Meanwhile a separate study by UBS has named Oslo as the most expensive city to live in, based on a basket of 122 goods and services, out of 72 cities across the world.

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