Home > Asia > China
Related topics: China,Asia, Featured Story, Research, Research & Education
October 30, 2014

GBTA Report: China's Business Travel Spend to Grow 18 Percent in 2015




The Global Business Travel Association Foundation has announced the results of its latest GBTA BTI Outlook – China report, a semi-annual analysis that relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market. The report, sponsored by Visa Inc., includes the GBTA BTI; an index of business travel spending that distills market performance over a period of time.


 
Key highlights of the report include:

“According to the latest International Monetary Fund report, China has overtaken the US to become the world’s largest economy in terms of purchasing power.” —Stanford Lin, Head of Products at Visa China

·         GBTA projects China’s total business travel spend to grow 15.9 percent in 2014 to $262 billion USD and another 18 percent in 2015.
·         Chinese economic activity rebounded in 2014 Q2 after a more sluggish start to the year, largely thanks to improving exports, stronger household consumption and stimulus-driven local government infrastructure spending.
·         Improving export performance as the world economy begins to improve is arguably an even more significant positive indicator for business travel, outbound in particular.
·         As previously forecasted, China is poised to overtake the U.S. as the number one business travel market in the world. Given our current projected growth in business travel in the two markets, we expect China to surpass the U.S. in spending by 2016.
·         GBTA expects China will see a continuation of robust domestic growth in 2014 and 2015, growing 16 and 18 percent respectively. This level of growth is unsustainable in the long run, however, unless levels of domestic consumption are boosted. This trend should be closely monitored by travel managers and travel suppliers doing business in China.
·         After a few years of tepid growth, China’s international outbound (IOB) travel is beginning to improve. GBTA expects IOB spending in China to grow 16 percent in 2014 and an additional 19 percent in 2015 to $13.4 billion USD.
 
“The unprecedented growth in China’s economy has propelled the country’s business travel market to represent roughly 20 percent of global business travel spending,” Welf J. Ebeling, regional director for GBTA Asia, said in a statement. “The continuation of China’s robust domestic economic growth is dependent on increased consumption. Chinese authorities are focused on maintaining these current levels of economic growth while continuing to execute a long-term strategy to rebalance the economy to be less dependent on exports and investments and more focused on consumption.”
 
“Economic growth in China continues to provide great potential for an active business travel market. According to the latest International Monetary Fund report, China has overtaken the US to become the world’s largest economy in terms of purchasing power,” Stanford Lin, Head of Products at Visa China, added. “In line with GBTA’s report, we are seeing that China’s business travel market continues to evolve in 2014, driven by fast-growing outbound travel.”  

 

Infrastructure Growth Necessary to Support Enormous Growth in Chinese Travel

Over the last decade, China’s largest airports have doubled in size and the construction of additional airports continues, including Beijing’s second international airport, slated to begin this year and open in 2018. In addition to airports, data from Lodging Econometrics shows 70 percent of the total room pipeline in Asia Pacific can be attributed to China as Beijing alone currently has 95 projects totaling 13,574 rooms. There is evidence, however, that the balance in the supply and demand for hotel rooms in China may be shifting as supply starts to catch up with demand.

Areas of Concern

Ongoing challenges exist in China’s manufacturing and real estate sectors – yet the economy will continue to advance at rates above 7 percent through 2015. Many media discussions call the housing sector China’s economic Achilles’ heel believing that China’s rapidly rising debt-to-GDP ratio and falling housing prices will lead to a debt-inspired collapse of the Chinese economy forcing a recession among its key trading partners. Unlike the U.S. housing collapse in 2006, however, China’s situation is dramatically different as there is less leverage, more equity and more policy weapons to soften the blow of falling asset prices. The real estate market bears watching, but its imminent collapse is unlikely.

Given that as much as 40 percent of the economy is dependent upon exports, strengthening exports is welcome news, as GBTA believes its importance is underestimated and overshadowed by the current media focus on real estate risk.

In addition to the report, GBTA Asia is also launching a new website today created specifically for business travel managers and suppliers in China. Available in both Mandarin and English, the GBTA China site will provide news, tools and other information relevant to the China travel market. 


What do you think of this $type?
 


PUBLISHING PARTNERS

 

GLOBAL ASSOCIATION PARTNERS

GLOBAL EVENT PARTNERS

   IT&CM China  Caribbean Meeting Incentive Travel Exchange      Gulf Incentive, Business Travel & Meetings Exhibition EIBTM IBTM IMEX America  IT&CMA IT&CM China IT&CM India Conventa BTC convene  cventMBTMMA 2013 COCAL 

GLOBAL AGENCY PARTNERS                                                                                           OFFICIAL TRADE SHOW PARTNER FOR THE UK MEETINGS MARKET 

MCI Ovation Euromic