Despite the continuing eurozone debt crisis, conditions in Europe are poised to improve — albeit it slowly — in 2012 and 2013, according to the Global Business Travel Association (GBTA), which last week released the results of its inaugural study into Western Europe's business travel sector.
According to the "GBTA Business Travel Index (BTI) Outlook – Western Europe," economic growth in 2012 will be positive in Northern Europe and negative in Southern Europe. In Northern European countries, for instance — the United Kingdom, Germany and France — business travel spending will be nearly flat this year, growing by 0.7 percent, 0.6 percent and 0.5 percent, respectively. In Southern European countries, however — Spain and Italy — it will decline by 4.1 percent and 5 percent, respectively.
Growth is similarly split between domestic and international business travel spending. In the United Kingdom, for instance, domestic business travel spending will grow by 2.7 percent in 2012, although international business travel spending will fall by 2.8 percent. In Germany, the numbers are 1.1 percent and -1.4 percent, respectively, and in France they are 0.7 percent and -2.7 percent.
"We are delighted to produce our inaugural analysis for Western Europe assessing likely business travel spend and economic growth levels for one of the world's most important trading zones," said GBTA Executive Director and COO Michael W. McCormick. "We found that economic growth across Europe will be constrained in 2012 with weakness in the first half giving way to improving prospects later in the year. Increasing economic growth in Germany, France and the U.K. will be offset by declines in many Southern European economies. Business travel is a leading indicator of the economy, so we're expecting a challenging scenario over the next year."
In 2013, the picture is brighter for the entire continent: Overall business travel spending in the United Kingdom, France and Germany is expected to grow by 4 percent, 5.1 percent and 5.4 percent, respectively. In Spain and Italy, meanwhile, losses will persist, but will be smaller. In Italy, for instance, declines in domestic and international business travel spending will be 0.6 percent and 1.9 percent, respectively. In Spain, domestic business travel spending will increase 1.9 percent, although international business travel spending will fall 1.1 percent.
"All five of the countries in the report are relatively mature and together form nearly 70 percent of Europe's business travel market," said GBTA Europe Managing Director Paul Tilstone. "As such, the results are highly indicative of the continent's overall performance. Forecasts for 2013 are very positive but 2012 shows a significant disconnect between Northern and Southern economies and domestic and international business travel spend."
Included in all GBTA "Business Travel Outlook" reports is the Business Travel Index (BTI), a headline measure of the current and projected level of business travel in a given market. In each country where it's measured, the BTI is set equal to 100 in the base year of 2005. At the last industry peak in late 2007, the BTI in the United States was 120. In the fourth quarter of 2011, it was 116. By contrast, the BTI in the United Kingdom is expected to be 117 by the end of 2013. In both France and Germany, GBTA predicts it will exceed 136. And in Spain and Italy, it will be 133 and 116, respectively.