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13 August 2014 | Gurjit Degun
Global business travel spending is expected to increase by up to 6.9 per cent this year, and 8.6 per cent in 2015.
Research by Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA) found that business travel spending reached $1.1 trillion (£659 billion) in 2013.
The report said that the growth will be “led by expansion in emerging markets” such as China, India, and Brazil. “Advanced economies will also strongly contribute as economic growth improves and pent-up demand is released,” the report explained.
Russia is to see the highest growth in business travel spend at 13.6 per cent in 2015, compared with -5.4 per cent this year. On the other end of the spectrum, the US is expected to see a slight decline to 5.9 per cent next year, compared with 6.8 per cent in 2014.
The study shows that travel managers are prepared for the rising costs, with those surveyed by GBTA expecting airfares to increase most among all categories due to consolidation in major markets.
The 2015 Global Travel Price Outlook is split into four categories – air, hotel, ground, and meetings and events. It said that airfares are expected to rise gradually through 2015 by 2.2 per cent. The report put this down to “rising demand and favourable cost structures”. It predicted Latin America to see the highest price increase at 3.5 per cent.
According to the research, hotel suppliers will be in a “better negotiating position than they have been for some time” in 2015. “This improved outlook could lead to greater pressure on negotiated rates for travel managers and buyers, and globally, prices are expected to rise by as much as 2.6 per cent”. Once again, Latin America is expected to lead the price rise, with an expected 6.3 per cent increase in managed rates.
Due to the “abundance of supply” in the ground transportation industry, global costs are expected to remain flat throughout 2015. “The trend will be similar across all regions, except Latin America, where moderate price growth of 2 per cent is expected in 2015, based on generally high travel demand throughout the region,” the report added.
For meetings and events, the survey found that there will be more domestic meetings and shorter booking lead times worldwide in 2015.
Joseph Bates, GBTA’s vice president of research, added: “Risks to the forecast including the escalating Ukrainian crisis; declining European inflation; burgeoning debt in China and oil price shocks could potentially have a negative influence on travel demand and pricing however, so travel managers are advised to consider contingencies for these risks in their planning.”