Many were hopeful that 2021 would be the year for getting back to travel and back to business. But the road to recovery for business travel wasn’t exactly a straight line this year. There were a lot of hurdles to clear – pandemic surges, the emergence of variants, vaccine uptake, government restrictions and border closings were just a few of the obstacles. But as we look toward 2022, there is optimism for more accelerated recovery ahead.
While more of the clouds are clearing and the business travel industry and business travellers overall are coming back, compared to other regions, Canada’s recovery has been lagging. The coming year should bring more recovery, but we’ll likely continue to see more changes and challenges.
Collaboration among stakeholders across the region will be critical for the business travel industry. The current provincial vaccine passport systems and the anticipated early 2022 rollout of a national vaccine passport will help enable the safer return to businesses, meetings, events, dining, and entertainment.
Canada has managed to control COVID-19 better than the U.S., however, Canadian business travel has been hamstrung by highly restrictive bans, eliminating all but the most critical of business travel. Recent loosening of restrictions should help aid the recovery in 2022.
Now that Canada’s borders are open to full vaccinated travellers by air and to Americans crossing land borders, we anticipate the acceleration of business travel recovery.
By The Numbers
According to Global Business Travel Association’s (GBTA) latest Business Travel Index Outlook (November 2021), business travel globally has started to rebound from its sharp downturn. After declining 53.8 per cent in 2020 to $661 billion USD, global expenditures are expected to reach 14 per cent for 2021 to $754 billion USD, slower than previously forecast.
A year-over-year surge of 38 per cent is expected in 2022 as recovery and pent-up demand kicks into a higher gear, bringing global spending back to over $1 trillion USD. By 2024, global business travel is forecast to have made a full recovery, ending the year at $1.48 trillion USD, or just above the 2019 pre-pandemic spend of $1.4 trillion USD.
In North America, spending fell to $137.8 billion USD in 2020, a 60 per cent decrease from 2019. U.S. business travellers accounted for 88 per cent of the regional spending total. Canada and Mexico made up the remaining 12 per cent, for a total of $15.9 billion USD.
North America remains the second largest business travel market with nearly 21 per cent of global spend in 2020, which is expected to climb to 23 per cent for 2021. The region was the hardest hit in 2020 but is experiencing the sharpest recovery in 2021 with an expected spending increase of 27 per cent to $256.4 billion USD (approximately $325.5 billion CAD).
Canadian business travel, however, continued to decline in 2021. Annual spending on Canadian business travel fell 54.5 per cent in 2020 to $11.7 billion USD (approximately $14 billion CAD) and is expected to fall another 9.8 per cent in 2021 to USD $10.6 billion ($13.46 billion CAD). But Canadian business travel is forecast to recover to pre-pandemic spending by 2024 to $27.1 billion USD (approximately $34.41 CAD).
In Canada, business travel for some industries has proven more resilient such as construction, professional services, scientific and technical activities, as well as real estate. However, the most impacted industries have been accommodation and food services, declining 43.8 per cent annually on average between 2019 and 2021. But the sector is expected to rebound sharply – growing an average of 21 per cent from 2020 to 2025.
GBTA research shows that 81 per cent of Canadian business travellers feel comfortable traveling domestically and 45 per cent are comfortable with international travel.
What Could Further Enable Recovery in Canada?
GBTA Canada continues to encourage the Canadian government to reassess the need for any pre-departure PCR testing for fully vaccinated visitors and returning Canadians. Additionally, having a coordinated effort nationally by the federal government would allow for a simplified, uniform vaccine certificate that will further enable mobility across Canada, and one that will be internationally recognized and accepted, to promote inbound and outbound international travel.
Even with an overall positive outlook for 2022 and beyond, there are potential challenges ahead. Persistent COVID-related threats and disruptions, supply chain strains, labour shortages, rising inflation, and a lagging recovery in many Asian markets are just a few of the risks for continued on-target recovery.
Additionally, and yet to be determined, are the impacts and adjustments needed for considerations such as broad adoption of remote working models, long term cuts or elimination of business trips and travel volume, and the increased focus on sustainability practices and policies for business travel.
Nancy Tudorache is regional vice president, Canada, at the Global Business Travel Association.