Business travel on the rise in Western Europe
Germany, the UK, France, Italy and Spain together form the lion’s share of business travel in the region, nearly 70%, and act as a good barometer of the health of the entire European business travel market.
The report, sponsored by Visa Inc., includes the GBTA BTI™, an index of business travel spending that distills market performance over a period of time. Key highlights of the report include:
- Business travel spending among the five markets is expected to hit $183 billion USD, (€144.7 billion) 3.3% growth over 2013. This projected gain would be the largest in Western Europe since the Great Recession.
- Germany remains the largest business travel market in Europe reaching $50.5 billion USD in 2012. This is expected to increase 5% in 2013 to $53 billion USD.
- The UK has the second highest level of spending on business travel in Western Europe – $40.6 billion USD in 2012 – expected to advance 1.6% in 2013 to $41.3 billion USD.
- Spain, Italy and France will all see their business travel markets contract in 2013 by -6.7%, -3.9% and -2.3% respectively.
- In 2013, domestic business travel will fare better than international outbound in all five markets except for the UK
“The upsurge in business travel spending, as noted by the BTI™, reinforces the fact that the Western Europe economy is stabilizing,” said Tad Fordyce, head of global commercial solutions at Visa Inc. “Although the recession took a toll on these markets, we are very optimistic this upward movement will continue the momentum into 2014.”
European economic growth remains a two-speed story with the Northern markets showing positive growth that has not yet been enough to compensate for the still-negative performance of the Southern tier.
Last year proved to be a challenging one for the Western European economy and for business travel. Business travel policies were tightened and budgets were reduced or frozen. Total travel spend across all five key country markets combined to register a decline of 2.2% in 2012, to $177.4 billion USD.
However, while Germany and the UK eked out small positive growth rates for the year, negative performance in Italy, Spain and France overwhelmed the slight growth in the North.
The Southern countries are expected to continue to decline for the remainder of the year and into early 2014, but with Germany and the UK gathering momentum, the region will see a return to growth in 2014. The GBTA Foundation expects travel spending to be essentially flat in 2013 then rise by 3.4% the following year.