Pack your bags, road warriors. Business travel is back in a big way.
Global business travel spending is projected to soar to $1.8 trillion by 2027, according to the 2023 GBTA Business Travel Index Outlook Report. This accelerated rebound defies earlier predictions of a more gradual recovery.
What’s fueling this welcome surprise? Pent-up demand, the return of in-person meetings, improved COVID conditions, steady economic growth, and some inflationary tailwinds.
After a 47% spike in global business travel spending last year to $1.03 trillion, 2023 promises an impressive 32% surge. Pre-pandemic spending levels of $1.4 trillion are expected to be eclipsed in 2024, a full two years ahead of initial forecasts.
Blending Business and Leisure
Today’s business travelers aren’t all work and no play. An impressive 62% say they’re blending business and personal trips more often than in 2019.
Nearly half (42%) tack extra vacation days onto work trips, bunking in the same lodging for both segments.
When business travel does resume fully, what can we expect the average trip to cost?
Surveyed business travelers estimate their individual business trip spending currently averages $1,018 per person. Here’s the breakdown:
- Lodging: $391
- Food and beverage: $189
- Airfare: $182
- Ground transportation: $136
- Miscellaneous expenses: $120
Faster Than Predicted Rebound
Global spending is projected to hit pre-pandemic levels by late 2024, a significantly accelerated timeline from the mid-2026 predictions made just last year. The remarkable stability of the global economy fueled this faster-than-expected bounce back.
“While headwinds were anticipated to have an impact on the global business travel recovery over the past year, they did not materialize which is welcome news,” said Suzanne Neufang, CEO of GBTA. “These latest forecasts now indicate an accelerated return to pre-pandemic spending levels sooner than expected as well as growth in the years ahead.”
The business travel rebound continues to vary sharply by region. Western Europe saw the fastest growth globally in 2022. North America and Latin America also witnessed considerably accelerated spending growth last year.
Emerging Europe lags in its recovery, challenged by the war in Ukraine.
The Asia-Pacific region was the major laggard last year due to China’s late economic reopening. Chinese business travel spending dropped 4.6% last year, pushing China out of its top global business travel market ranking for the first time since 2014.
However, China is expected to regain the number one position by the end of 2023 as spending recovers.
The business travel recovery also continues to differ significantly by industry. Construction, education, and professional, scientific, and technical services displayed the greatest resilience.
“The resilience of the global economy has been a key factor in the current rebound. However, many challenges remain, including the war in Ukraine, lingering inflation in some regions, much tighter global financial conditions, and deteriorating manufacturing activity,” the report cautions.
It also highlights possible headwinds: “Increased focus on sustainability initiatives, widespread adoption of meeting technologies, growing remote workforce, and the rise of ‘bleisure’ travel could be game-changers for the future of business trips.”
Business travel is undeniably on the rise globally. While pre-pandemic spending levels are expected to be eclipsed in 2024, some key questions remain.
Will travel volumes continue to rebound robustly? How will challenges like inflation shape future growth? What long-term changes lie ahead?
One thing is clear: Road warriors are back in business. Buckle up for an eventful ride.