Business travel could hit $2T — as long as these two things don’t stop it
FBN's Grady Trimble on the decline in foreign travel to the U.S. after China issued a warning over travel to the U.S.
Global spending on business travel could hit a whopping $2 trillion by 2022 as long as trade tensions between the United States and China and Brexit negotiations with the United Kingdom and the European Union, don’t stop it.
A report from travel-data website Skift took the temperature of corporate travel managers and business travelers to find emerging trends and industry hang-ups.
The report showed spending in the sector is “healthy and growing.” It pointed to the Global Business Travel Association’s forecast, which predicted worldwide business-travel spending could grow 7 percent in 2019, with spending hitting $1.7 trillion globally by 2022.
Business travel trends. (Courtesy of Skift.)
Still, some obstacles stand in the way, namely, the escalation of the U.S.-China trade war and Brexit negotiations in the United Kingdom.
“More people are putting their caution flags up,” Hilton Chief Executive Officer Christopher Nassetta, said during a second-quarter earnings call. “It doesn’t mean that they’re not spending, or hiring or traveling. It just means they’re a little bit more cautious because of what’s going on in the broader environment.”
Others in the industry are less worried, arguing that global events are not likely to a strain spending because many long-term business travel commitments have been made.
“I don’t think, from a company perspective, we’re going to push down,” David Wieseneck, vice president of finance for e-commerce brand letgo, told Skift about the company's travel plans. “We make revenue. We have funding from investors. We’re going to continue to grow our business. And if that includes face-to-face travel, then we’re going to have to make it so.”
Face-to-face travel is a big part of companies’ appeal, particularly in sales.
“For my job, it’s pretty critical,” Mike Ramirez, of software firm Looker, told Skift. “Selling into the enterprise space, you’re doing a couple massive deals a year, which require face time.”
Business travel trends. (Courtesy of Skift.)
Annual budgets dedicated to business travel activity are estimated to be between $1 million and $2.5 million, accounting for 12 percent of corporate travelers in the survey.
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Even with virtual-meeting options gaining prominence, respondents were unanimous in their support of in-person visits. About 80 percent of corporate decision-makers and business travelers agreed that “meeting in person is more effective than meeting virtually.”
A third of survey-takers said they take up to 20 work trips in a year, and more than 90 percent agreed that business travel is important for driving their company’s growth.