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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