Business travel spending among the five European markets (Germany, U.K., France, Italy and Spain) is expected to hit $186.5 billion in 2014, a 5.1% growth over 2013, according to the latest “GBTA BTI Outlook – Western Europe” report by the Global Business Travel Association (GBTA)— a semi-annual analysis of the five most critical travel markets in Europe.

These five markets together form nearly 70% of business travel in this region and act as a good barometer of the health of the entire European business travel market, says GBTA. Sponsored by Visa Inc., the report includes the GBTA BTI — an index of business travel spending that distills market performance over a period of time.

According to the GBTA, key highlights of the report include:

• Among the five markets, the projected rate of growth is expected to increase by 6.5% in 2015 to $198.6 billion.

• 2014 is expected to be the first year since 2010 where all five European business travel markets (in the analysis) will see gains in business travel spending.

• The outlook for four of the five markets (Germany, U.K., France and Spain) were all revised upward from expectations in the “GBTA BTI Outlook – Western Europe 2013H2.” 

• Improved business confidence and expectations for stronger economic and employment growth contributed to stronger expectations for both domestic and international outbound business travel in Western Europe.

• While the north and south divide in Europe still exists — and Germany and the U.K. will again lead the way in business travel spending for the rest of the region — France, Italy and Spain now appear to be showing signs of recovery.

“Continued signs of strength and progress in the European economy and gathering momentum suggest that 2014 will be a transition year,” said Catherine McGavock, GBTA’s regional director for Europe. “At long last, the 2012-2013 recession appears to be over and the European economy is on a more solid footing. While challenges remain, this is very positive news and bodes well for business travel growth as business confidence rises across the region.”

Although this European outlook appears positive, the debt crisis is far from over and the emerging markets currency risk has recently showed the potential for financial shocks, according to the GBTA. In addition, there is concern over current rates of disinflation leading to deflation, which can lead households and businesses to delay purchases in anticipation of lower future prices and cause aggregate spending to drop.

“According to the report, stronger economic conditions are forecast to lead to an across-the-board increase in business travel throughout Western Europe,” said Tad Fordyce, Visa’s senior vice president, global commercial solutions. “As 2014 progresses, there are still economic hurdles to clear, but the overall forecast is trending in a positive direction.”