The Global Business Travel Association (GBTA) released the results of its second GBTA Business Travel Index (BTI) Outlook — China on Oct. 17.
The GBTA BTI Outlook for China revealed a slowdown in growth due to a lower level of demand for Chinese exports in the U.S. and Europe. The GBTA predicts that total business travel spending in 2012 will grow by 12.5% to $195 billion, and in 2013 will see a growth of 14.7%.
Graph courtesy of the GBTA.
Additionally, international outbound travel (IOB) will grow 5.5% in 2012 as China’s main export partners recover, the GBTA report said, with growth increasing to by 17.5% to reach $10 billion in 2013. See the graph above to see how IOB has historically correlated with the country's exports.
Domestic travel spend will grow by 12.8% in 2012 and it is expected to jump another 14.6 % to reach $213 billion by 2013, according to the GBTA.
China has increased the size of the four largest airports and added more hotel rooms in order to boost business travel. The Chinese government has purposely rebalanced the economy toward domestic growth over the past few years through the introduction of fiscal stimulus with an increase in infrastructure spending.
China business travel will pass the U.S. by 2014, a year earlier than previously forecasted, based on the current growth rates and investment in infrastructure, the report said.
The GBTA BTI Outlook projects aggregate business travel trends over the next eight quarters. The report tracks business travel spending in total and by domestic and outbound segments.
The report uses a model that relates measures of business travel spending to key economic and market drivers of business travel including: Gross Domestic Product (GDP) and its components; employment and unemployment; measures of business and consumer confidence; international trade, foreign direct investment and exchange rates; commodity and oil prices; inflation measures; productivity rates for business travel; International Air Transport Association (IATA) Passenger and Revenue Performance and Smith Travel Research (STR) Global Hotel Performance.