GBTA: Biz Travelers Will Spend Big in Western Europe in 2014 and 2015

THE PULSE: GBTA Foundation Forecasts Western Europe Business Travel Spend to Grow in 2014 and 2015.

WHY IT RATES: It's always a good breeze lifting the tell tale when business travel is picking up. Though most European economies continue to struggle, the fact that business travel is rallying even in struggling countries such as Spain and Italy, bodes well for travel all around. Business travelers often bring spouses, discover new interests abroad and in general, prime the pumps for all manners of travel. - James Ruggia, TravelPulse Europe senior editor

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The GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), today announces the results of its latest GBTA BTI™ Outlook – Western Europe report, a semi-annual analysis of the five most critical business travel markets in Europe:Germany, the UK, France, Italy, and Spain. These five markets serve as a good barometer of the health of the entire European business travel market. The report, sponsored by Visa Inc., includes the GBTA BTI™, a proprietary index of business travel spending that distills market performance over a period of time.

Key highlights of the report include:

Business travel spending in the five markets is expected to hit €147.1B ($186.4 billion USD) in 2014, a 4.9 percent growth over 2013. The projected rate of growth is expected to increase by another 6.6% in 2015, to €156.8B ($198.7 billion USD), as overall spending picks up.
2014 is shaping up to be a true bounce-back year for European travel. Business travel spending in the five European business travel markets advanced by 4.3% over the first half of the year -- the largest gain in business travel spending since 2010.
The UK, Sweden, and even Spain experienced growth, while the economies of Italy, France, and Denmarkstalled in the first half of 2014. Despite a weak second quarter, the German economy continues to remain one of the most robust in all of Europe.
Overall economic conditions throughout Europe continue to be sluggish, however, with only 0.8 percent growth in Euro Area GDP in the first quarter of 2014 and no growth during the second quarter. Hig h unemployment rates persist and household incomes are not yet increasing at confidence-boosting rates. Businesses continue to be reluctant to borrow, hire, and invest.
Given the region's continued low levels of inflation, slowly improving domestic demand, and more favorable credit conditions, GBTA anticipates modest economic growth going forward. GBTA anticipates an increase in real Euro Area GDP of 0.9 percent in 2014 and 1.7 percent in 2015, which will contribute to stronger business travel activity.

"After experiencing many quarters of decline, Europe appears to be stabilizing and starting to bounce back," said Catherine McGavock, Regional Director for Europe for GBTA. "We still face many hurdles, but it appears the tides are gradually changing for economies all over Europe. This will contribute to a strong 2014 and 2015 for business travel throughout the region."

"With business travel spending forecast to rise in 2015, businesses are looking for ways to effectively manage expenses and help improve their bottom line," said Sandra Alzetta, Executive Director, Core Products, Visa Europe. "As a leader in the corporate travel market, Visa provides best-in-class solutions to improve reporting and automation on business travel purchases."

Country-Level Business Travel Outlooks

Germany

Spending on business travel totaled €10.4 billion ($14.3 billion USD) in 2014 Q2, a gain of 7.5 percent from the same period in 2013.
GBTA expects business travel to grow by 7.4 percent in 2014 and by 10.8% in 2015.
International outbound business travel (IOB) from Germany rebounded in 2013, expanding 5.3 percent over 2012. GBTA expects that spending will grow 6.5 percent in 2014 but will be tested by slower export growth in 2015.

United Kingdom

The UK had the second highest level of spending on business travel in Western Europe in 2013 -- £26.5 billion ($41.3 billion USD). GBTA expects spending to increase nearly 5 percent this year and 6 percent next year.
Domestic spending is poised for strong growth in 2014 and 2015, with projected growth rates of 5.6 percent and 7.7 percent, respectively.
International outbound business travel is projected to grow by 3.7 percent in 2014 and another 12.1 percent in 2015.

France

French business travel spending increased by 1.3 percent during the second quarter of 2014, to €6.6 billion ($9 billion USD).
Despite the sluggish economy, GBTA expects total business travel spending to rise by 3.3 percent in 2014 and by 4.6 percent in 2015.
After significant declines in 2012-13, international outbound spending will grow by 5.4 percent this year and 2.9 percent in 2015.

Spain

The Spanish economy appears to be on the mend, with positive growth for the past few quarters. The IMF forecasts growth of 1.3 percent in 2014 and 1.7 percent in 2015, its highest projections for any advanced European economy.
The improvement in the economy has increased spending in business travel, with a 6.7 percent year-over-year increase in such spending during the second quarter of 2014.
Both domestic and international outbound travel spending are expected to increase significantly (by at least 4.6 percent) in both 2014 and 2015.

Italy

The Italian economy has continued to struggle. The IMF has projected a 0.1% decline in GDP in 2014 and a modest 1.1% increase in 2015.
After falling in 2013, business travel spending increased by 1.1 percent year-over-year in the second quarter of 2014. GBTA anticipates slow travel growth (1.4 percent and 2 percent) in 2014 and 2015, respectively.
International outbound business travel is expected to increase by 4.7 percent in 2014 and 6.7 percent in 2015, a rate at least 3.7 percentage points higher than projected domestic spending growth.