The Global Business Travel Association (GBTA) recently held its European Town Hall to look back at 2020 and discuss its annual BTI Outlook with a focus on Europe.
In 2019, Europe comprised 27% of global business travel, attributing $392 billion to the $1.43 trillion global business travel spending. Business travel in Western Europe accounted for approximately 23.4% of this global figure ($334.7 billion) and Eastern Europe (Emerging Europe) accounted for 4.0% ($57.2 billion). The six largest markets in the region (Germany, U.K., France, Italy, Spain and the Netherlands) accounted for 76.7% of expenditure in Western Europe.
Pre-pandemic business travel in Western Europe had already started to slow, increasing by only 1.3% between 2018-2019 (the average global business travel growth over the last 10 years was 5.1%, slowing to 1.5% 2018-2019).
Key findings of GBTA’s BTI Outlook include an analysis of 2020 challenges for the business travel industry as well as a recovery forecast.
“The impact of COVID-19 on business travel has varied by region and there is no doubt Western Europe is one of the regions to be impacted the most,” said Catherine Logan, regional VP, EMEA. “The dependence of many countries and companies on inter-regional activity and economic activity, whilst navigating a complex array of country restrictions and policies from the outset, have made it increasingly difficult to navigate.”
She continued, “The recent spike in cases across Europe and the growth of mutant strains hindered any recovery in Q4 2020 and continues to hinder progress into this year. GBTA have been calling for European governments to work together, and I am delighted the European Commission have agreed a common approach to travel measures, to help drive a coordinated approach for a safe return to business travel.”
2020 Losses and Challenges:
- Despite a relatively strong (pre-COVID) first quarter of 2020, European spending on business travel is estimated to decrease by 58% (to $140 billion) year on year (January-December 2019 vs. January- December 2020), making it one of the most impacted regions along with North America.
- Business travel expenditure in Western Europe is estimated to plummet by 77% year-over-year (to $59.8 billion), from the start of the pandemic to year-end (from April 1-Dec. 31), illustrating the true global financial impact of COVID-19.
- In the European emerging markets, a decline of 63% (to $29.7 billion) in business travel expenditure is estimated year-over-year (from April 1-Dec. 31).
- The impact of COVID-19 on business travel has varied across the region.
- GDP in the Eurozone (includes the 19 member states of the Euro Area) is estimated to have shrunk by 7.4% in 2020 (compared to 4.4% globally), reflecting a sharper COVID-driven downturn than in many advanced economies.
- In the U.K. the downturn is more severe with predicted growth down by -11.2% GDP in 2020 due to a slower pandemic response and the ongoing Brexit uncertainty.
- Out of the top 15 business travel markets in 2020, the U.K., U.S. and Germany are predicted to be worst hit falling by 61.7%, 61.1% and 60.9% in business travel spend respectively.
- Western Europe’s market share has fallen 4 percentage points since its 2010 peak when it made up 27.3%
Forecast on Business Travel Recovery:
- GDP growth in the Eurozone is expected to bounce back by 3.6% in 2021, and 4.2% in the U.K., in part stronger due to the lower base of 2020.
- A $25.9 billion increase in business travel spending is projected in Western Europe in 2021 (18.5%). Emerging Europe will see an increase of $5.6 billion (18.9%). Most of this gain is expected to come at the end of 2021 as vaccinations increase globally and business confidence returns.
- The biggest economic recovery is to come from the emerging markets, particularly the Asian markets who will continue to drive the global economic growth in 2021 and beyond.
- While a full recovery to pre-pandemic levels is expected globally by 2025, data for Western Europe shows business travel may take longer to reach pre-pandemic levels.
- By 2024 GBTA expects business travel in Western Europe to recover to 78% of 2019 levels ($261 billion). Emerging Europe is expected to recover fully by 2024.
- CAGR (Compound Annual Growth Rate) in business travel expenditure in Western Europe between 2019-2024 is expected to be -4.9%. Belgium, Sweden and Germany being the worst hit with recovery continuing beyond this forecast timeframe.
- In 2022, the BTI Outlook forecasts growth in business travel, including a significant pick-up in group meeting activity and international business travel.