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GBTA Report predicts recovery in North Europe and continued trouble in the South during 2012, but higher levels of business travel spend across all Europe in 2013

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Category: Agency & Association

Created on Tuesday, 12 June 2012 15:01

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 UK, France, Italy and Spain.

Highlights
Growth in business travel spending (“BTS”) in the three major European economies: Germany, the UK and France will be nearly flat in 2012:
UK is forecast to grow BTS by 0.7%
Germany is forecast to grow BTS by 0.6%
French BTS is forecast to decline by 0.6%

Forecast levels of 2012 BTS in Germany, UK and France all exhibit growth in domestic travel, but declines in international outbound spending (“IOB”):
UK domestic BTS is forecast to grow by 2.7% but IOB is forecast to fall by 2.8%
German domestic BTS is forecast to grow by 1.1% but IOB is forecast to fall by 1.4%
French domestic BTS is forecast to grow by 0.7% but IOB is forecast to fall by 2.7%

Growth levels in 2013 BTS in Germany, the UK and France will be much stronger with both domestic BTS and IOB showing increases:
Germany is forecast to grow overall BTS by 5.4%
France is forecast to grow overall BTS by 5.1%
The UK is forecast to grow overall BTS by 4.0%

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% and 5.0% 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 UK are forecast to grow by 0.5%, 0.6% and 0.7% 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% and 1.9% declines in 2012 GDP, respectively

Michael McCormick, Executive Director and COO of GBTA, commented: “We are delighted to produce our inaugural analysis for Western Europe assessing likely business travel spend and economic growth levels for one of the world’s most important trading zones. 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 UK 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.”

Paul Tilstone, Managing Director of GBTA Europe, commented: “As for business travel; all five of the countries in the report are relatively mature and together form nearly 70% of Europe’s business travel market. 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. “Our relationship with the GBTA and our support for research such as the BTI provides us with an opportunity to understand the key trends in the business travel industry and ensure that the solutions we provide to financial institution customers and their clients in the public and private sectors continue to be best-in-class.”