Transcript Global Business Travel Association

GBTA BTI™ Economic Outlook and
Business Travel Forecast
Joe Bates
Vice President, Research
GBTA Foundation
Research
Sponsored by:
1
Agenda
• Who is GBTA
• Why Business Travel Matters
– Travel Drivers: Exports, Profits, Employment
• Global Economic Health
– Still a Two-Speed World
– Four Principal Economic Challenges
• Global Business Travel Outlook
– Global Overview
– Top Tier Markets: Some Struggle, Some Soar
– US Overview
• Q&A
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Global Business Travel Association
• GBTA is the world’s premier business travel and
meetings organization
• Collectively, GBTA’s 5,000-plus members manage
over $340 billion of global business travel and
meetings expenditures annually
• GBTA provides its network of 21,000 business and
government travel and meetings managers, as well as
travel service providers, with networking events,
news, education & professional development,
research and advocacy
3
Our (Current) Global Footprint
Europe
Canada
Mexico
Asia
South
Africa
South
America
Australia / New
Zealand
4
Rapid Expansion Continues
2013
2012
- Asia
- Africa
- India
- Russia
- Middle
East
2010-2011
- Europe
- Latin
America
5
GBTA Membership
6
GBTA BTI™ Global Outlook
and Forecast 2012-2016
Comprehensive report covering global economy,
business travel trends/challenges, and 5-year
projections
Global GBTA BTI™ Data “Cube” detailed database of industry sales
and business travel spending:
 for 75 countries by 48 industries
 covering 2000-2016
Data Cube
Domestic
BTS
(75 Countries)
and IOB
Professional & Business
Services (48 Sectors)
Business Travel
Spend (in $USD)
IOB
BTS
 country breakouts for domestic
Industry Sales
(in $USD)
Annual Metrics
2000
 Selection of pivot tables & graphs
For more information contact
GBTA Foundation Research or
visit The Hub
2016F
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GBTA BTI™ Outlook – Unites States 2012 Q3
•
The GBTA BTI™ Outlook – United
States projects aggregate business
travel trends over the next eight
quarters. The report includes key
buy-side metrics such as total
business travel volume and
spending, plus supply-side
projections of changes in costs,
across both transient (individual)
and meetings travel.
•
The Q9 2012 report is the ninth in
the series.
•
Quarterly reports are released the
second Tuesday of each quarter.
Webcasts are usually held the third
Thursday of each quarter.
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Why Business Travel Matters
Travel Drivers: Exports & Employment
9
125
147
US Employment
GBTA BTI™
120
115
145
143
110
105
141
GBTA BTI™
139
100
95
2005Q2
US Employment (millions)
GBTA BTI™ and
US Employment
137
2007Q2
2009Q2
2011Q2
Sources: GBTA BTI ™ Outlook – United States, GBTA Foundation (October 2012)
Bureau of Labor Statistics, United States (October 2012)
10
Domestic Business Travel Highly
Correlated With Employment
French Domestic Business Travel Highly Correlated With
Job Growth
30.0%
2.5%
2.0%
Yr-to-Yr % Change
20.0%
1.5%
1.0%
10.0%
0.5%
0.0%
0.0%
-0.5%
-10.0%
-1.0%
-1.5%
-20.0%
Domestic Business Travel (left)
-30.0%
Employment (right)
-2.0%
-2.5%
Source: OECD, IATA, Rockport Analytics
11
International Outbound Travel Highly
Correlated With Exports
12
Global Economic Health
Still a Two-Speed World
13
Global Economy: Historical Perspective
Global Growth Slows Against Rising Uncertainty
13
Yr/Yr % Change
8
3
-2
-7
-12
2000
Real GDP
2002
Industrial Production
2004
2006
2008
2010
2012
2014
2016
Source: IMF, IHS Global Insight, Wells Fargo Securities, Rockport Analytics
14
Global Recovery is Still Moving at Two
Different Speeds
Elephants & Gazelles Are Still Running, But Both Are Slower in 2012-2013
10
Forecast
8
Real GDP %
6
4
2
0
-2
-4
2000
World
2002
2004
Advanced Countries
2006
2008
Emerging Markets
2010
2012
2014
2016
Source: IMF, IHS Global Insight, Rockport Analytics
15
U.S., Europe, & Japan Struggle
While Asia, LatAm, and MEA Soar
Yr/Yr % Change in Real GDP
10
8
Europe & Japan Struggle, U.S. Slowly Moves Ahead, Asia
Paces World Growth
2010
2011
2012
2013
2014-2016
6
4
2
0
-2
North
Latin Western Emerging Mideast- SubAmerica America Europe Europe N. Africa Saharan
Africa
Japan
Other
AsiaPacific
Source: IMF, IHS Global Insight, Rockport Analytics
16
Global Recovery 2012-2013:
Driving Fhrough the Fog
• European debt crisis and mini-recession are hitting global
growth hard
• China’s expansion has slowed in the wake of flagging
export markets
• Fiscal imbalances in most advanced economies are
reducing domestic demand through austerity programs and
tax hikes
• Oil prices remain elevated
• Inflation remains in check despite central banks keeping
their feet on the monetary accelerator
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Global Economic Health
Four Principle Economic Challenges
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The European Recession is the Primary
Economic Challenge Facing the World
19
European Debt Woes Have Pulled the
Region Into a Mild Recession
GDP - Yr/Yr % Change
4
Southern Europe Pulls Euro Area Into Mild Recession
North Vs. South
3
2
1
0
-1
-2
Germany
2010
France
2011
United
Kingdom
2012
2013
Italy
Spain
2014-2016
Source: OECD, IMF, Rockport Analytics
20
20
China’s Growth is Slowing: Fear of
Hard Landing
China Real GDP Growth
 Global slowdown
has hurt Chinese
exports
 Up until recently
China was
reducing loan
growth in an
attempt to cool
real estate prices
 Fear of outsized
knock-on effects
of slowing
exports will hurt
employment and
consumption –a
hard landing
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Silver Lining: China’s Economy is Shifting
From Exports Towards Consumption
China Real Retail Sales
9.0%
Forecast
Year-on-Year % Change
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2008Q1
2009Q1
2010Q1
2011Q1
2012Q1
2013Q1
2014Q1
Source: National Bureau of Statistics China, IMF, Moodys Analytics, Rockport Analytics
22
Combination of Headwinds
Drain U.S. Recovery
U.S. Real GDP Growth to Struggle Through 2013
6
Yr/Yr % Change
4
2
0
-2
-4
European woes, persistent
unemployment, and 2013 fiscal cliff
combining to slow economic growth
-6
2000
2002
2004
2006
2008
2010
2012
2014
2016
Source: Bureau of Economic Analysis, Moodys Analytics, Rockport Analytics
23
Lackluster Job Growth
24
Persistently High Unemployment
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The Fiscal Cliff is Looming
Fiscal Cliff:
CBO Estimates of Policy Changes
FY 2013
(in Bils $)
Impacts
REVENUE
Expiration of Bush Tax Cuts
Expiration of 2011 Payroll Tax
Cut
Tax Increases from Affordable
Health Care Act
Other Expiring Provisions
$221
Rise in tax rate for top 4 brackets (top
bracket from 35% to 40%), increase in
cap gains from 15% to 20%, increase in
tax rate of first $7k from 10% to %15
$95
Reduces take-home pay by about 2%
$18
Additional 3.8% capital gains tax
$65
Marriage penalty returns, Education
benefits reduced, child tax credit
reduced…
-$65
DoD cuts particularly egregious
-$26
Reduces federal obligations beginning
in 2012
-$11
Over and above Affordable HC Act
SPENDING
Sequestration from Budget
Control Act
Expiration of 2011 Emergency
Unemployment Benefits
Reduction in Medicare Payments
to Physicians
Source: Congressional Budget Office, Wells Fargo Securities
26
Global Inflation Also Growing at Two
Different Speeds
10
8
Consumer Price Inflation
Yr/Yr % Change
6
4
2
0
-2
2010
North
America
2011
2012
2013
2014-2016
Latin
Western Emerging MideastSubAmerica Europe Europe N. Africa Saharan
Africa
Source: IMF, IHS Global Insight, Wells Fargo Securities, Rockport Analytics
Japan
AsiaPacific
(less
Japan)
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Inflation Should Moderate With Lower
Oil and Weaker Demand
Still well north of
$100/bbl…
$140
Brent Crude in USD$ per barrel
$120
$100
Forecast
$80
$60
$40
$20
$0
2000
2003
2006
2009
2012
2015
Source: Energy Information Administration, IHS Global Insight, IMF, Rockport Analytics
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Giving Central Banks the Slack to Keep
Their Feet on the Monetary Accelerator
Central Bank Policy Rates

Policy rates near
zero

Quantitative
easing programs
in U.S. & U.K.

ECB loans to
troubled banks

Operation Twist
in the U.S.

China’s
administrative
policy to lower
credit standards

Atypical cyclical
response…so far
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Global Business Travel Outlook
Global Overview
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Global GBTA BTI™
•
Global GBTA BTI™- derived
from business travel spending,
is a holistic measure of the
health of any given business
travel market.
•
Highly correlated with Global
Sales, although BTI™ is
increasingly growing at a
slower rate, as biz travel’s
productivity improves.
GBTA BTI™ Global Growth
2011 – 9.3% 1.026 Trillion USD
2012 – 4.6% 1.074 Trillion USD
2013 – 8.2% 1.162 Trillion USD
2014 – 7.5% 1.249 Trillion USD
2015 – 7.8% 1.347 Trillion USD
2016 – 7.2% 1.445 Trillion USD
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Business Travel Spending: Dominated by
The U.S., China & Western Europe
Total Business Travel
Spending: Top 15
Markets - 2011
United States
China
Japan
Germany
UK
France
Italy
South Korea
Brazil
Canada
India
Australia
Russia
Spain
Netherlands
World
2011 Total
BTS ($
Billions
USD)
$251.0
$173.2
$66.0
$50.0
$40.2
$36.5
$35.3
$29.6
$27.6
$21.7
$20.8
$20.5
$19.9
$19.4
$18.6
$1,026.2
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Global BTS At a Glance…
Business Travel Spending Report Card:
How Did We Do Last Year?
2011 Business Travel Spending Growth
Top 15
Markets
United States
China
Japan
Germany
United Kingdom
France
Italy
South Korea
Brazil
Canada
India
Australia
Russia
Spain
Netherlands
World
2011 Report
2011
Projection
6.9%
14.7%
2.8%
7.6%
9.1%
5.2%
2.9%
15.5%
16.8%
9.8%
10.7%
5.4%
13.7%
4.8%
5.6%
9.2%
2012 Report
2011
Actual
7.2%
16.7%
4.8%
4.0%
3.8%
2.4%
3.0%
13.4%
17.3%
7.2%
15.5%
6.5%
17.8%
-2.6%
8.0%
9.3%
Diff
0.3%
2.0%
2.0%
-3.6%
-5.3%
-2.9%
0.1%
-2.1%
0.5%
-2.6%
4.8%
1.1%
4.1%
-7.4%
2.4%
0.0%
Global Business Travel
Spending Reached $1.02T
USD in 2011 up 9.3% from
$939B in 2010
2011 Business Travel Spending By Region
Domestic plus Outbound International
Other
11%
North
America
27%
Western
Europe
26%
Emerging
Europe
5%
Latin
America
4%
Asia Pacific
36%
Middle East
& Africa
2%
Source: Rockport Analytics, GBTA Foundation
33
Global Business Travel Outlook
Top Tier Markets: Some Struggle, Some Soar
34
Many Trends Remain: BTS Growth Still
Moving at Two Different Speeds
Average BTS Growth Rates: Developed vs.
Emerging Markets*
16.0%
14.1%
14.0%
11.1%
12.0%
10.0%
9.8%
8.6%
9.0%
8.0%
5.1%
6.0%
3.1%
4.0%
2.0%
2014
Developed Market BTS
2015
Emerging Market BTS
2016
2007
2011
2016
117
167
125
153
148
129
115
312
127
228
228
158
135
660
158
372
482
190
•
BTS growth in emerging
markets continues to
dwarf growth in the
developed world
•
Growth gap closes
towards the end of the
outlook’s horizon –
growth multiple of < 2x by
2015
3.4%
0.0%
2013
US
China
Germany
Brazil
India
Australia
5.2%
0.4%
2012
GBTA BTI™
*Developed: W. Europe, US, Canada, Australia;
Emerging: China, India, Brazil, Indonesia
35
High-Flying Growth Markets Continue to
Add Mass to Their BTS
Global Total
7.7%
36
Growth in Business Travel Spend: $ Gain
Top 15 Markets Ranked by 2011-2016 $ Growth
In Millions of
US $
Country
2011-2016 Change in BTS
CAGR
2011-2016
BTS 2011
BTS 2016
China
173,223
365,806
16.1%
192,582
1
United States
250,985
296,168
3.4%
45,182
2
India
20,850
44,077
16.2%
23,227
3
Brazil
27,553
44,931
10.3%
17,377
4
South Korea
29,619
41,940
7.2%
12,321
5
Germany
49,976
62,129
4.4%
12,153
6
Russia
19,917
29,684
8.3%
9,767
7
United Kingdom
40,162
49,278
4.2%
9,116
8
France
36,494
45,526
4.5%
9,032
9
Indonesia
14,070
22,502
9.8%
8,433
10
Japan
65,961
72,602
1.9%
6,641
11
Italy
35,324
39,979
2.5%
4,655
12
Turkey
12,726
17,282
6.3%
4,556
13
Australia
20,502
24,733
3.8%
4,231
14
Netherlands
18,650
22,033
3.4%
3,384
15
$1,026,194
$1,444,601
7.1%
$418,408
World
Rank
37
Business Travel Outlook
United States Overview
38
39
GBTA BTI™ Reveals
US Business Travel Challenges in 2012
40
Global Business Travel Outlook
International Outbound
41
Spending on International Outbound (IOB)
Business Travel is Growing
Top 15 BTS Markets: Domestic vs IOB Shares
Country
United States
China
Japan
Germany
United Kingdom
France
Italy
South Korea
Brazil
Canada
India
Australia
Russia
Spain
Netherlands
World
International BTS
Share
Domestic BTS Share
13%
4%
10%
21%
35%
39%
11%
21%
20%
28%
11%
11%
2%
23%
20%
87%
96%
90%
79%
65%
61%
89%
79%
80%
72%
89%
89%
98%
77%
80%
18%
82%
IOB as a
share of total
global BTS
has grown
from 14% in
2000 to 18%
in 2011
42
International Outbound from US
Has Flat-Lined in 2011 and 2012
43
Business Travel Challenges
Short Term –Taking Off or Grounded for Low Visibility?
• European Crisis is the largest downside risk to global business travel
• The European mess is compounded by a slowdown in China & anemic growth in the US
• Volatile and uncertain global economy have shaken business confidence delaying
purchases and putting pressure on travel budgets
• With stable oil and slower demand, travel prices should moderate over the next year.
Some price uncertainty remains, however.
Medium Term –Continued Two-Speed Growth World
• Slower recovery, particularly in developed markets, suggest some resource reallocation
• Travel suppliers must continue to entice travelers to front of cabin and add hotel stars
• Advanced economies: Europe’s challenges continue; US needs to make progress on
unemployment and deficits; Japan struggles with debt and demographics
• Emerging economies: Political stability, infrastructure improvements, growing domestic
consumer base, competitiveness diminishes as incomes rise
Long Term –Travel Remains a Critical Business Input
• Elephants and Gazelles continue to alter global market mix.
• Infrastructure challenges, air traffic control, fleet management, hotel supply, meetings
technology… –drive for greater efficiency
• Regulation, security, energy, climate change,…
44
Joe Bates
Vice President, Research
GBTA Foundation
[email protected]
45