Worldwide business travel spending is set to rise by more than a quarter this year and reach two thirds of pre-pandemic levels by 2022, according to the World Travel & Tourism Council (WTTC).
The forecast comes in a major new WTTC report in collaboration with McKinsey & Company called "Adapting to Endemic Covid-19: The Outlook for Business Travel."
It draws on research, analysis and in-depth interviews with Travel & Tourism business leaders to enable organizations to prepare for corporate travel in the post-pandemic world.
According to the new report, the modest boost for business travel with global business travel spend rising 26% this year will be followed by a further rise of 34% in 2022.
But this comes in the wake of a 61% collapse in business travel spend in 2020, following the imposition of extensive travel restrictions with considerable regional differences in the bounce back around the world.
To speed up the recovery of business travel, the report recommends businesses adjust their revenue models, expand geographic focus, and improve digital services.
The shared challenge of restoring business travel will also depend on ongoing collaboration and partnerships across the private and public sectors and nurturing new relationships.
“Business travel is starting to pick up. We expect to see two thirds back by the end of 2022," said Julia Simpson, WTTC CEO and president. “Business travel has been seriously hit but our research shows room for optimism with Asia Pacific and Middle East first off the starting blocks."
Recovery by region
Considering this year and next, WTTC data shows which regions around the world are leading the revival in business travel, led by the Middle East:
- Middle East - Business spending is set to rise by 49% this year, stronger than leisure spending at 36%, followed by a 32% rise next year
- Asia-Pacific - Business spending is set to rise by 32% this year, and 41% next year
- Europe - Set to rise by 36% this year, stronger than leisure spending at 26%, followed by a 28% rise next year
- Africa - Spending is set to rise by 36% this year, slightly stronger than leisure spending at 35%, followed by a 23% rise next year
- Americas - Business spending is expected to rise by 14% this year, and by 35% in 2022.
The report details how global travel-related spending declined significantly from 2019 to 2020, as a result of COVID-19 and the ongoing restrictions to international mobility.
WTTC’s report also shows significant changes over the past 18 months, particularly in demand, supply, and the overall operating environment which affect business travel.
Demand for business travel has been slower to recover than leisure and corporate policies continue to influence business travel demand according to national travel restrictions.
Some sectors 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.
The report emphasizes the continuing importance of business travel and the spend it generates for global economic growth.
Before the pandemic, business travel accounted for around 70% of all global revenue for high-end hotel chains while between 55 and 75% of airline profits came from business travellers, who made up around 12% of passengers.
WTTC believes while business travel will return, its uneven recovery will have important implications across the global travel and tourism sector, making private public partnerships even more important in the months and years ahead.