The global business travel market, valued at a substantial $689.70 billion in 2021, is poised for significant expansion, projected to reach a staggering $2.1 trillion by 2031. This growth is expected to occur at a robust compound annual growth rate (CAGR) of 9.5% from 2022 to 2031, according to a recent report.
Several key factors are driving this remarkable growth. Business travel encompasses journeys undertaken for diverse purposes, including essential meetings, trade shows, networking opportunities, and strategic partnerships. The increasing globalization of business, coupled with the emergence of online travel agencies (OTAs) such as Booking.com, KAYAK, and Expedia, has played a pivotal role in facilitating this growth. Furthermore, the expansion of the MICE (Meetings, Incentives, Conferences, and Exhibitions) sector is a significant contributor to the flourishing business travel market.
The trend of blending business with leisure, commonly known as “bleisure travel,” is gaining traction, shaping the future of business travel. Smart hotels, equipped with advanced technology, and the integration of virtual reality in hotel bookings are further enhancing the experience and convenience for business travelers. The adoption of robotics in hotels for guest assistance and food service is also a noticeable trend, streamlining operations and enhancing customer satisfaction.
Looking at the segment insights, the food & lodging segment is anticipated to experience the fastest growth, with a projected CAGR of 9.8% during the forecast period. The corporate sector held a dominant position in the market in 2021, accounting for a significant 65.9% of the global business travel share.
While advancements in technology, such as video conferencing, have undoubtedly reduced the need for some business travel, increased investment in infrastructure and the travel retail market is creating new opportunities for growth. Moreover, governments worldwide are actively taking initiatives to stimulate small and medium enterprises (SMEs) and attract foreign direct investments (FDIs), providing further impetus to the business travel industry.
Regionally, North America continues to be the leading region in the business travel market. In 2021, the United States emerged as the largest market in North America and is projected to reach $374.5 billion by 2031, growing at a CAGR of 8.7%.
The COVID-19 pandemic had a severe impact on the business travel sector, leading to a significant 52% decline in travel spending in 2020. However, government initiatives, such as Singapore’s measures to revitalize MICE events, are playing a crucial role in the industry’s recovery. The pandemic has also accelerated the adoption of hybrid travel models, combining virtual and in-person interactions, which is expected to continue shaping the future of business travel.
