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Global Business Travel Association Reports Global Business Travel Up 4.6%
Over 2011 but Economic Recovery Moving at Two Different Speeds

By D.R. Stewart, Tulsa World, Okla.McClatchy-Tribune Regional News

July 31, 2012-- Global business travel spending is projected at $1.07 trillion in 2012, a 4.6 percent increase over 2011, but the economic recovery from the 2008 recession is moving at two different speeds, an industry analysis has found.

And, while U.S. business travel spending has not returned to pre-recession levels, business travel spending in Oklahoma has increased significantly on the strength of the energy, construction and manufacturing sectors, officials said.

"In the first six months of the year, corporate travel is 8.3 percent ahead of last year at World Travel," said Alex Eaton, president of Tulsa's World Travel Service, the largest corporate travel agency in the state. "I attribute our growth to the private sector, non-government business travel. At the beginning of the year, I thought we would be up 4 percent to 5 percent."

The Global Business Travel Association's "Annual Global Report & Forecast," released this month, says global business travel spending has increased 3.4 percent annually during the last four years, but unevenly across the world.

In compiling its report, the GBTA surveyed 48 industry sectors in 75 countries.

The growth of global travel spending, the report found, is being paced by the emerging economies of five countries that have experienced double-digit business travel spending during the last year:

--Russia: 17.8 percent growth, to $19.9 billion;

--Brazil: 17.3 percent, to $27.6 billion;

--China: 16.7 percent, to $173.2 billion;

--India: 15.5 percent, to $20.8 billion, and

--South Korea: 13.4 percent, to $29.6 billion.

"Europe and Japan are both struggling under the weight of debt restructuring, slowing exports and anemic domestic demand," GBTA's report says. "The U.S. is stressed with the fallout from these external challenges plus a few homegrown ones such as persistent unemployment and large fiscal imbalances. ... Business confidence has dropped back from levels achieved earlier this year, ushering in more cautious stances on hiring, equipment purchases and, unfortunately, business travel.

"Companies are still dispatching their road warriors; they are just doing so at a slower, more cautious pace."

Joseph Bates, senior director of research for the GBTA, said raw materials and the construction industries are the leading business travel sectors.

China, for instance, is an economic juggernaut that has grown at a double-digit pace over the past decade, Bates said

"This has translated to significant growth in business travel spending -- China has gone from $32 billion in business travel spending in 2000 to $173 billion in 2011, compound annual growth of 16.6 percent," the GBTA report found. "In 2006, China surpassed Japan to become the second-largest business travel market in the world and is set up to take the top spot from the U.S. as early as 2014."

In the emerging markets of China, Brazil, India and Russia, industrial development wis outpacing demand, Bates said.

"These economies rely on raw materials, construction and utilities -- they're building the infrastructure of their economy," Bates said. "It's not surprising those economies are leading the way."

Bates said U.S. business travel spending is expected to grow 3.7 percent annually through 2016.

Leading the charge of U.S. business travel spending will be the construction industry, up 10.8 percent annually through 2016; education, 10 percent; real estate, 5.8 percent; paper and paper products, 5.5 percent; and petroleum, 3.3 percent.

"Traditionally, business services, banking and finance, and retail have been the biggest areas of growth, but they really aren't growing right now," Bates said.

The survey found Brazil to be an emerging economic powerhouse that accounted for 61 percent of Latin America's business travel spending in 2011.

"We expect Brazil to continue to be one of the great business travel stories over the coming years," the GBTA report says.

"Infrastructure improvements, increased political stability and the growth of a middle class have put Brazil in tremendous position to become a major global economy and a leading business travel market. Total spending in business travel is expected to grow 9.6 percent on average, over the next five years."

In Oklahoma, business travel spending will be pressured by the increasing costs of travel, industry officials said.

"Prices are going to continue to go up -- hotel, air (fares) and car rentals are increasing, and it's going to continue for the forseeable future," Eaton said. "There will be a tipping point where people will say, 'OK, we're going to stop business travel because it's too expensive.' I don't see that happening this year."

Global business travel spending in 2011, by region Asia Pacific: $366.05 billion

North America: $279.3 billion

Western Europe: $267.6 billion

Emerging Europe: $49.58 billion

Latin America: $45.5 billion

Middle East and Africa: $18.09 billion

Source: Global Business Travel Association's Annual Global Report & Forecast

D.R. Stewart 918-581-8451 don.stewart@tulsaworld.com

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(c)2012 Tulsa World (Tulsa, Okla.)

Visit Tulsa World (Tulsa, Okla.) at www.tulsaworld.com

Distributed by MCT Information Services



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