China on track to become the globes s primary business travel market – GBTA
Almasalla Travel News – Rebalancing of domestic economy will enhance business travel outlook in China, according to the reports and research figures published by GBTA. The GBTA commissioned Rockport Analytics, LLC to create a semi-annual business travel outlook for China. Sponsored by Visa, it provides insights for corporate travel professionals and the broader business community into both short- and long-term trends in Chinese domestic and international outbound business travel activity.
China’s economy growth has been impacted by the protracted slowdown in key trading markets, notably in North America and Europe. Export growth remains vital to China’s economic prospects, and neighboring countries, such as Hong Kong and the ASEAN nations, have taken up part of the shortfall. Consumer retail sales and domestic investment are widely viewed as emerging pillars of the Chinese economy, although expansion of both has been slower than expected in 2013. The good news is that both consumer and producer inflation rates have remained relatively mild.
The Chinese economy remains a robust engine for economic growth at home and abroad, even though the sources of that growth are experiencing dramatic change, and that means the outlook for business travel remains positive. The combination of improved economic sentiment in global markets and projected diversification of domestic consumption are welcomed, especially as China’s domestic business travel spend continues to show strong correlations with retail sales. Outbound travel is clearly driven by China’s trade performance, but job growth and supply indicators will also prove to be critical.
China is growing its business travel market faster than any other nation, and continues to close the gap on the U.S. as the largest business travel economy in the world. The surge in Chinese business travel spend has been driven by domestic and international outbound business travel, with expansion noted for both transient and group meetings and events travel. GBTA expects total spending on Chinese-originated business travel to grow 14.3% in 2013, to $224 billion (¥1,371 billion) – down from the 15.1% forecast in our 2013H1 report. In 2014, total business travel spend growth should reach 17.2%, slightly up on the 16.9% previously projected.
Domestic travel continues to perform better than international outbound. GBTA expects this trend to continue with domestic travel spend forecast to grow 14.3% in 2013, and another 17.2% in 2014. In comparison, international outbound business travel from China has slowed considerably over the last two years. Growth is likely to reach 12.8% in 2013, followed by another 16.5% in 2014 – though continued weakness in global key export markets means these figure are well down on the surging IOB growth witnessed during the first decade of the millennium.