Inflation and labor shortages will delay recovery in business travel spending – industry forecast

Business travelers enter the airport hotel in Denver, Colorado, U.S., November 3, 2017. REUTERS/Rick Wilking

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Aug 16 (Reuters) – A recovery in global business travel spending to pre-pandemic levels is expected to be delayed 18 months to 2026 due to factors including persistent inflation, high air prices energy, labor shortages and lockdowns in China, a new industry forecast shows.

The Global Business Travel Association (GBTA) said business travel spending rebounded 5.5% to $697 billion in 2021, with North America leading the recovery, but remained strong below 2019 levels of $1.4 trillion.

The outlook for recovery is more pessimistic than the GBTA’s last forecast released a year ago, when it predicted a full rebound to 2019 levels by 2024.

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Environmental sustainability considerations and the regional impact of the war in Ukraine are also weighing on travel demand, according to forecasts.

“Factors affecting many industries around the world are also expected to impact the global business travel recovery in 2025,” GBTA CEO Suzanne Neufang said in a statement. “The predicted outcome is that we will come close, but we will not reach or exceed pre-pandemic levels of 2019 until 2026.”

Global Business Travel Group Inc (GBTG.N), owner of the world’s largest corporate travel agency, American Express Global Business Travel, said last week that revenue this year is expected to average about 65% of 2019 levels, although this does not include the impact of a possible recession.

Airlines and hotels are counting on strong leisure demand to fill the void left by the drop in business travel during the pandemic.

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Reporting by Jamie Freed in Sydney Editing by Chris Reese

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