BRICs No Longer A Bloc For Biz Travel Growth

Open Jaw

While China and India are projected to continue to fare well, Brazil and Russia are currently heading in a different direction.


China and India business travel will continue to grow at double digit rates over the next 2 years, a clear indication of the resiliency and strength of both economies.


Despite recent economic turmoil, China business travel spending is projected to grow at 11.2% in 2015 and 10.7% in 2016. China is poised to become the global leader in business travel by mid-2016, with travel spending forecasted to increase by more than 60% from 2014 to 2019.


Additionally, strong momentum is powering business travel growth in India, projected at 11.1% in both 2015 and 2016. This is a reflection of an improving business climate under Prime Minister Narendra Modi, as well as high levels of domestic economic activity.


The findings come from GBTA’s BTI Outlook semi-annual reports, conducted by the GBTA Foundation and sponsored by Visa, Inc.


“The BRICs are no longer a bloc when it comes to business travel,” said Michael W. McCormick, executive director of the Global Business Travel Association. “A decade ago, it looked like these 4 nations would develop in lockstep, with high rates of growth across the board. But their paths have diverged sharply as a result of the unique political and economic situations in each country. China and India continue to be business travel juggernauts, a reflection of the underlying strength of both economies even in a tough global economic environment. Brazil and Russia, on the other hand, face growing economic turbulence, turmoil and uncertainty.”


China Outlook:  Surging Despite Speed bumps


China’s business travel market represents roughly 20% of global business travel spending, up from just 5.1% in 2000. A total of $262 billion was spent on business travel initiated in China in 2014. Only the U.S. is larger at $284 billion. By mid-2016, China will become the largest business travel market in the world. While its growth will slow slightly, China business travel will increase by 61% over the next 5 years, to $420 billion in 2019.


India Outlook:  Poised for Breakout Growth


India is the 10th largest business travel market in the world. In 2014, India had $26 billion in business travel spending, which the forecast says will grow by a compound annual growth rate of 11.5% through 2019 to $45 billion. 15 years from now, India will likely be a top 5 market in business travel spending.


GBTA projects that Indian business travel spending will grow 11.1% in both 2015 and 2016. The near-term prospects for the Indian economy continue to improve and the business travel market remains one of the healthiest in the world.


Brazil Outlook:  Heading In A Negative Direction


GBTA expects total business travel spending in Brazil to decline by 1.5% in 2015, a significant downgrade from GBTA’s projection of 1.8% growth earlier this year. GBTA expects improvement in 2016 as spending growth is poised to bounce back to 1.2% growth.


Russia Outlook:  Serious Headwinds


Russian business travel growth faces serious headwinds. In total, GBTA expects business travel spending in Russia to fall 17% in 2015 to $17.5 billion.  GBTA says the decline in Russian growth can be attributed to the collapse of oil prices, international sanctions and overall weakness in the global economy.


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