BANGKOK -- Business travel within Asia is growing at twice the pace of the rest of the world and looks set to overtake the top-spending Americas within 10 years, according to research by the World Travel and Tourism Council, a leading industry body, and Travelport, a U.S.-based travel commerce platform.
The research, presented at the WTTC Global Summit on travel and tourism in Bangkok on Thursday, shows that the business travel sector -- which accounted for nearly a quarter, or 23%, of all travel worldwide and was valued at $1.2 trillion in 2016 -- is set to grow by 3.7% per year over the next decade. But the strongest growth is expected in emerging market economies, with the Asia-Pacific region leading at a predicted rate of 6.2% in business travel each year to 2027.
The white paper called "Maximising Opportunities for Business Travel Growth," defined business travel as trips undertaken by employees on behalf of their companies or organizations.
It highlighted the top 10 countries with the strongest forecast annual business travel growth over the next 10 years. They include, in Asia, China at the top with 9.5% annual growth to 2027, followed by Myanmar at 8.7%, Hong Kong 8%, Cambodia 7.4% and India 7.2%. In Africa, Rwanda and Gabon lead with 8.5, followed by Tanzania at 7.9%.
Among factors influencing such growth is the increasing use of technology, both in supporting travelers and travel operators, as well as in related areas. "Increasingly, business travelers want mobile phone alerts and information about disruptions, flight updates and upgrades," the report noted. There is also a growing need to serve digitally connected millennials and for the industry to deploy data-driven insights to engage customers more effectively, it added.
Business travel is also spurring overall growth in the contribution of travel and tourism to gross domestic product as companies continue to find ways to develop new markets and maximize revenues. The prominence of countries emerging from conflict such as Sudan, Sri Lanka, Angola and Rwanda on the list of fastest growing business travel markets highlights the link between peace and economic development, noted the report.
Spending soars
Globally the travel and tourism sector contributes $7.6 trillion -- representing 10.2% of global gross domestic product -- to investment and economic growth, once all direct and indirect factors are taken into account, the report said. The sector also accounts for an estimated 292 million jobs or about 10% of all jobs worldwide.
Across the general tourism and travel industry, business travel leads the way as a vital driver of jobs and economic growth.
In 2016, countries with the largest business travel-related expenditures were those with both the biggest economies and travel-tourism economies, with the U.S., China, the U.K., Germany and Japan leading the table. In these five countries alone, business travel spend amounted to $665 billion in 2016, 58% of the total.
Sweden and Malaysia were "particularly interesting outliers," with their business travel significantly higher than would normally be expected for countries with similar-sized travel and tourism sectors.
Spending in the business travel sector has also been a key economic driver for many countries. In the past five years, for example, business travel spend has advanced rapidly in many emerging markets with the Democratic Republic of Congo rising by 32% between 2011 and 2016, Qatar by 25%, Azerbaijan 21%, and Mozambique 19% over the same period, according to the report. Overall, business travel spending globally has grown at an annual average of 3.6% and is forecast to grow at 3.7% per year for each of the next 10 years.
Regionally, South Asia led with average annual growth of 11.3%, although from a relatively low base. In most regions, business travel growth over the past five years outperformed direct travel and tourism GDP growth overall.
The report estimated that by 2027, corporate travel spending in Asia-Pacific will more than double to an annual $645 billion from the current $334 billion, according to WTTC projections. The region will make up half of the global total, significantly outperforming the Americas.
A key factor in boosting both volume and value of business travel and related spending has been improvements in visa processing and related bureaucracy in eight of the top 20 fastest-growing business travel destinations. Such reforms directly helped sector growth and the overall economies.
While business travel is rising rapidly, bureaucracy is among the impediments to further growth in the general tourism sector and in particular, business travel, according to proposals contained in the report. The proposals underscored the need for investment in technology and infrastructure, removal of visa burdens, more effective action on cyber security and personalizing services for travelers.
The report's authors noted that such barriers are curbing potential growth. "For the benefit of business travelers, for companies looking to do business and build trade, and for the destinations that can do far more to maximize experience (and thereby increase spending), they need to be broken down," they said.
The three most urgently needed reforms are the reduction of the restrictive visa regimes, an upgrade of lagging technological infrastructure, and improvements in data security. These need "collective industry action, better communication and improved coordination between companies and governments to enable the further growth of business," the report said.
