GBTA predicts business travel spending in China to increase by 15 percent in 2013
SHANGHAI—The Global Business Travel Association (GBTA) has released the results of its third GBTA BTI Outlook—China 2013 H1 report, a semi-annual analysis of one of the largest business travel markets in the world. The report, sponsored by Visa, includes the GBTA BTI; an index of business travel spending that distils market performance over a defined period. Highlights of the report include:
After expanding by 7.8 percent in 2012, China’s economy should continue to usher the world out of its economic slowdown. GBTA forecasts that China’s GDP will increase by 8.3 percent in 2013, with growth predicted to be just below 9 percent in 2014;
The Chinese authorities remain committed to re-balancing the economy to stimulate domestic investment and consumer demand;
China’s total business travel spending increased by an average 15.5 percent per year from 2000 to 2012. Business travel spending is forecast to increase by 15.1 percent in 2013 to $226 billion (RMB1,379 billion). The projected expansion of 16.9% in 2014 is more than twice the rate of the US; and
Domestic business travel will outperform international outbound. In 2013, domestic travel spend should grow by 15.2 percent, with an increase of 16.9 percent in 2014
Growth in international inbound will pick up slightly following a slowdown in 2011 and 2012.
China’s sustained, if slightly weaker, GDP growth means the outlook for business travel is still very positive. The combination of an expected recovery in global markets and rising domestic consumption should yield further positive results. GBTA forecasts a 15-percent increase in total business travel spend in 2013, although stronger spending in the third and fourth quarters will offset comparatively tepid growth in the first half of the year.
Domestic travel has been performing better than international outbound over the last two years. GBTA expects this trend to continue as firms maneuver to serve rapidly growing markets across China. Domestic travel spend is projected to grow by 15.2 percent in 2013, and by 16.9 percent in 2014. International outbound business travel from China has slowed considerably.
Overall, Chinese business travel spending boasts high potential growth. In the 12 quarters since the global recession ended in Q4 of 2009, the GBTA BTI in China has added 122 points. Larger gains are forecast for the next two years. A predicted expansion of 63 points in 2013 will be followed by growth of 78 points in 2014, resulting in China eclipsing the 500 mark for the first time during the fourth quarter. Some of this growth will come from rising travel prices, perhaps as much as 6-8 percent, but the remainder represents real increases in trip volume and spend-per-trip. If these growth rates were achieved, China would overtake the US as the largest business travel market in the world in 2015.