GBTA Predicts Flat Business Travel Outlook for Western Europe
By James Ruggia
June 12, 2012 11:04 PM
The Global Business Travel Association (GBTA), the world's premier business travel and corporate meetings organization, revealed the results of its inaugural "GBTA Business Travel Index (BTI) Outlook -- Western Europe" economic analysis, sponsored by Visa Inc. This semi-annual series includes the GBTA BTI, which provides a method for distilling market performance and the outlook for business travel into a single metric to be tracked over time. "GBTA BTI Outlook -- Western Europe" includes an analysis of the five most critical business travel markets in Europe -- Germany, the U.K., France, Italy and Spain.
Growth in business travel spending (BTS) in the three major European economies -- Germany, the U.K. and France -- will be nearly flat in 2012. The U.K. is forecast to grow BTS by 0.7 percent, Germany by 0.6 percent, and French BTS is forecast to decline by 0.6 percent. Forecast levels of 2012 BTS in Germany, the U.K. and France all exhibit growth in domestic travel, but declines in international outbound spending (IOB). U.K. domestic BTS is forecast to grow by 2.7 percent, but IOB is forecast to fall by 2.8 percent; German domestic BTS is forecast to grow by 1.1 percent, but IOB is forecast to fall by 1.4 percent; and French domestic BTS is forecast to grow by 0.7 percent, but IOB is forecast to fall by 2.7 percent.
Growth levels in 2013 BTS in Germany, the U.K. and France will be much stronger with both domestic BTS and IOB showing increases. Germany is forecast to grow overall BTS by 5.4 percent, France by 5.1 percent, and the U.K. by 4 percent.
Southern European countries -- Spain and Italy -- will experience even steeper declines in BTS due to slower economic growth rates and austerity measures. 2012 is forecast to see declines of 4.1 percent and 5 percent for Spain and Italy, respectively.
Overall, the European economic situation will weigh heavily on countries' economic growth levels. In 2012, GDP in Germany, France and the U.K. are forecast to grow by 0.5 percent, 0.6 percent and 0.7 percent, respectively. This will be due more to the indirect impact of Southern Europe rather than domestic weaknesses. Sovereign debt crises in Italy and Spain will lead to 1.8 percent and 1.9 percent declines in 2012 GDP, respectively.
According Michael McCormick, executive director and COO of GBTA, “We found that economic growth across Europe will be constrained in 2012 with weakness in the first half giving way to improving prospects later in the year. Increasing economic growth in Germany, France and the U.K. will be offset by declines in many Southern European economies. Business travel is a leading indicator of the economy, so we're expecting a challenging scenario over the next year.”
“As for business travel, all five of the countries in the report are relatively mature and together form nearly 70 percent of Europe's business travel market,” said Paul Tilstone, managing director of GBTA Europe. “As such, the results are highly indicative of the Continent's overall performance. Forecasts for 2013 are very positive, but 2012 shows a significant disconnect between Northern and Southern economies and domestic and international business travel spend.”
"Whether for business or pleasure, Visa account holders spent more than $235 billion on travel related purchases in 2011 -- a 14 percent increase from 2010," said Tad Fordyce, head of global commercial solutions at Visa Inc. Non-members may purchase the report through the GBTA Foundation.