GBTA
forecasts that China’s GDP will increase by 8.3% in 2013, with
growth predicted to be just below 9% in 2014.
China’s
total business travel spending increased by an average 15.5% per year
from 2000 to 2012. Building on this impressive performance, business
travel spending is forecast to increase by 15.1% in 2013 to $226
billion (RMB1,379 billion). The projected expansion of 16.9% in 2014
is more than twice the rate of the U.S.
GBTA
publishes the results of its third GBTA BTI™ Outlook – China 2013
H1 report, a semi-annual analysis of one of the largest business
travel markets in the world. The report, sponsored by Visa, includes
the GBTA BTI™; an index of business travel spending that distils
market performance over a defined period.
The
Chinese economy managed a soft landing in 2012 despite the drag on
its export sector caused by the protracted slowdown in Europe and the
U.S. Export growth remains vital to China’s economic prospects, and
neighboring countries are taking up part of the shortfall, such as
Malaysia, Taiwan, Singapore and Vietnam. To counteract diminished
international trade, prudent monetary and fiscal policies are
designed to stimulate domestic consumer demand. With China’s formal
transfer of leadership completed in March 2013, President Xi Jinping
has confirmed the government will continue to pursue qualitative
growth by rebalancing the economy.
China’s
sustained, if slightly weaker, GDP growth means the outlook for
business travel is still very positive. The combination of an
expected recovery in global markets and rising domestic consumption
should yield further positivity. GBTA forecasts a 15.1% increase in
total business travel spend in 2013, although stronger spending in
the third and fourth quarters will offset comparatively tepid growth
in the first half of the year.
Continued
growth in business travel spend
Domestic
travel has been performing better than international outbound over
the last two years. GBTA expects this trend to continue as firms
maneuver to serve rapidly growing markets across China. Domestic
travel spend is projected to grow by 15.2% in 2013, and by 16.9% in
2014. In comparison, international outbound business travel from
China has slowed considerably, with total IOB travel spending falling
to 11.8% in 2011, and 10.9% in 2012. Growth is likely to recover to
13.3% in 2013, and a stronger 16.3% in 2014 – though still far
removed from the surging IOB growth witnessed during the first decade
of the millennium.
Overall,
Chinese business travel spending boasts high potential growth. In the
12 quarters since the global recession ended in Q4 of 2009, the GBTA
BTI™ in China has added 122 points. Larger gains are forecast for
the next two years. A predicted expansion of 63 points in 2013 will
be followed by growth of 78 points in 2014, resulting in China
eclipsing the 500 mark for the first time during the fourth quarter.
Some of this growth will come from rising travel prices, perhaps as
much as 6-8%, but the remainder represents real increases in trip
volume and spend-per-trip. If these growth rates were achieved, China
would overtake the U.S. as the largest business travel market in the
world in 2015.
