SINGAPORE, Oct. 21, 2015 /PRNewswire-USNewswire/ -- China and India business travel will continue to grow at double digit rates over the next two 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 percent in 2015 and 10.7 percent in 2016. China is poised to become the global leader in business travel by mid-2016, with business travel spending forecasted to increase by more than 60 percent from 2014 to 2019.
Additionally, strong momentum powers business travel growth in India, projected to be 11.1 percent in both 2015 and 2016. This is a reflection of an improving business climate under Prime Minister Narendra Modi, as well as the high levels of domestic economic activity.
These findings come from GBTA's BTI™ Outlook semi-annual reports on Brazil, China, India and Russia, conducted by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), 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 four 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: Despite Speedbumps, Will Become #1 Business Travel Market in 2016
China's business travel market represents roughly 20 percent of global business travel spending, up from 5.1 percent in 2000. A total of $262 billion was spent on business travel initiated in China in 2014. Only the United States is larger with $284 billion in business travel spending in 2014. By mid-2016, China will become the largest business travel market in the world. China business travel will increase by 61 percent over the next 5 years, from $262 billion in 2014 to $420 billion in 2019.
Looking forward, GBTA projects that business travel spending in China will grow at 11.2 percent in 2015 and 10.7 percent in 2016. While very strong, that's significantly lower than the 14.2 percent for 2015 and 12 percent for 2016 projected earlier this year, a shift which comes as a result of the recent economic uncertainty.
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 will grow by a compound annual growth rate (CAGR) of 11.5 percent through 2019 to $45 billion. Fifteen years from now, India will likely be a top-five market in business travel spending.
In 2015 and 2016, Indian business travel spending will continue to benefit from an improved business climate, strong consumer confidence, a revival in investment and lower energy prices. GBTA projects that business travel spending will grow 11.1 percent in both 2015 and 2016.
GBTA's business travel forecast for 2015 and 2016 is being upgraded for the third period in a row, following similar upgrades in the second half of 2014 and the first half of 2015.
The near-term prospects for the Indian economy continue to improve and the business travel market in India remains one of the healthiest in the world.
Brazil Outlook: Business Travel Spending Projected to be Negative
GBTA expects total business travel spending in Brazil will decline by 1.5 percent in 2015, a significant downgrade from GBTA's projection of 1.8 percent growth earlier this year. GBTA expects improvement in 2016 as spending growth is poised to bounce back to 1.2 percent growth to $31.7 billion.
Domestic business travel in Brazil continues to weaken as unemployment hits a five-year low, consumer spending continues to slow, and the Brazilian Real has been devalued.
The growth in domestic business travel activity has significantly slowed over the last few years. Since hitting a peak of 20.5 percent in 2011, spending growth slowed to 8.8 percent in 2012, to 5.1 percent in 2013 and all the way to 3.5 percent last year.
Russia Outlook: Serious Headwinds
Russian business travel growth faces serious headwinds. In total, GBTA expects business travel spending in Russia to fall 17 percent in 2015 to $17.5 billion USD, revised down from the 2015Q1 forecast of a 2.7 percent decline. We expect further declines in domestic performance in 2016, as spending falls another -10.1 percent to $13.7 billion USD.
The decline in Russian growth can be attributed to the collapse of oil prices, international sanctions and overall weakness in the global economy.
About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. Collectively, GBTA's 7,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA provides its growing network of more than 28,000 travel professionals and 125,000 active contacts with world-class education, events, research, advocacy and media. The Foundation was established in 1997 to support GBTA's members and the industry as a whole. As the leading education and research foundation in the business travel industry, the GBTA Foundation seeks to fund initiatives to advance the business travel profession. The GBTA Foundation is a 501(c)(3) nonprofit organization. For more information, see gbta.org and gbta.org/foundation.
SOURCE Global Business Travel Association