Business Travel is on solid ground in Western Europe
Travel After experiencing several difficult years followed by slow growth, business travel in Western Europe is finally standing on solid ground.
We are still seeing businesses saving for the future in case the economy backslides as the optimism has not fully set in yet, but that pessimism is starting to abate and that is good news for business travel.
The GBTA Foundation releases a semi-annual analysis of the five most critical business travel markets in Europe: Germany, the UK, France, Italy and Spain, which serve as a good barometer of the health of the entire European business travel market. As economic momentum propels business travel spending forward we expect spending to increase by 6% this year to €154.79B followed by another 6.1% increase in 2016 with business travel spend reaching €164.15B according to our most recent forecast.
Not surprisingly, Germany and the UK led the way in business travel spending. Germany held its position as the brightest star in the European sky when it comes to business travel as strong economic growth and relatively competitive labour markets continue to propel business travel activity. GBTA projects robust double-digit business travel spending growth this year at 10.1% for the country.
The UK boasts the second highest level of spending on business travel in Western Europe at £27.5B and continues to gain momentum.
The surprise came in Spain. The Spanish economy was one of the most challenged in Western Europe from 2011 through 2013 as it battled high levels of public debt, soaring unemployment and stagnating economic growth. Spain has exhibited a remarkable economic turnaround, however, driven by the banking sector and stabilization of public debt – and fortunately, business travel has followed suit! Spending advanced 6.8% in 2015 and we expect it to continue to grow another 7.7% this year reaching €15.19B.
A trend we are seeing across Western Europe is a shift toward domestic business travel demand driving growth more so than international outbound travel. International outbound spending will continue to remain challenged through 2015 thanks to a weaker global economy.
Much has been made in the news lately about lower energy prices. We expect these sharply lower energy prices to provide another boost for Europe’s consumers. However this income boost will accumulate slowly with each successive utility bill or petro fill-up though, so it will take time for the benefit of lower oil prices to be fully realized.
Businesses are investing in business travel and it is paying off. Business travel drives business growth. Together, the stronger economy, lower energy prices and smart fiscal policies are all pointing to a strong 2015 and 2016 for business travel throughout the region.