China to top US business travel spending by 2016
Despite concerns over a slowdown in the world's second largest economy, China's globe-trotting businessmen are on track to top travel spending by 2016, overtaking their U.S. counterparts, according to a new survey by the Global Business Travel Association (GBTA).
Business travel spending in China has soared over the past decade driven by the economy's stellar performance. Mainland businessmen spent $225 billion on travel in 2013, up from $32 billion in 2000, logging an average growth of 16.2 percent.
Spending by their U.S peers has been far more subdued in comparison, at 1.1 percent annually since 2000, reflecting a long, drawn-out period of economic sluggishness. Last year, corporate America – the world's largest business travel market – spent $274 billion on travel.
This shift in business travel spending is set to continue, according to Michael McCormick, Executive Director of GBTA.
"This report underscores that China, along with the other BRIC countries of Brazil, Russia and India are leveraging their business travel expenditures into more economic opportunities," he said.
Asia Pacific is already the largest business travel region in the world, comprising 38 percent of global business travel. Two-thirds of the activity in the region comes from China and Japan.
This year, global business travel spending is expected to hit a record $1.18 trillion, marking a 6.9 percent rise over the previous year.
Business travel is seen a barometer of the global economy, which is expected to expand 3.4 percent this year, up from 3.2 percent in 2013, according to the International Monetary Fund.
Geopolitical tensions & travel
Any escalation in geopolitical tensions in Eastern Europe is set to weigh on business travel in the region, according to GBTA.
"Instability in Ukraine is currently the biggest impediment to business travel growth in emerging Europe," it said.
Tensions between Russia and Ukraine have ratcheted up over the past two weeks following the downing of the Malaysia Airlines Flight MH17 over eastern Ukraine on July 17. Pro-Russian separatists are believed to have shot down the jet, killing all 298 people on board.
Business travel spending in Russia could fall more than five percent in 2014 if the crisis continues, GBTA said.
Last year, Russia was the 11th largest market for business travel after India, with spending totaling $22 billion.
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