The Global Business Travel Association said that China is in a position to overtake the U.S. as the largest business-travel market in the world by 2016. According to Bloomberg, the Asian country will take the No. 1 spot due to slowing inflation and an increase in export growth.
Wage gains, consumer prices below government targets and increasing exports since mid-2013 will help to support the country’s projected rise in spending and business-travel market expansion. The source reported that the U.S. on the other hand, has seen lower employment, wage and economic growth.
“China, along with the other BRIC countries of Brazil, Russia and India, are leveraging their business travel expenditures into more economic opportunities,” Michael McCormick, GBTA executive director said in a statement. “We expect to see this shift in business travel spending to continue.”
Spending increases expected across the globe
Business travel spending is expecting to increase by 6.9 percent worldwide in 2014 to reach $1.18 trillion. The GBTA said that spending will rise by 8.6 percent in 2015 before slowing down between 2016 and 2018.
Business travel spending in China has risen by an average of 16 percent each year since 2000 while spending has only increased in the U.S. by 1.1 percent during the same period, Bloomberg reported.
The GBTA report also found that China will make up for half of the increase that’s expected in Asia’s commercial aircraft fleet. At the end of the year, there will be 6,000 planes that belong to Asian carriers, but that’s expected to rise to 10,300 in 2020 when additional deliveries will arrive. At the same time China’s fleet is expected to rise, the number of planes in the U.S. fleet will be at approximately 7,200.
However, that isn’t always good news for travelers in China as the country has congested airspace and delays are experienced with about 25 percent of flights. The source reported that the country also only allocated 20 percent of its available airspace to civil aviation.
In addition to a growing fleet, Asia and the Pacific region will add approximately 30 percent more hotels rooms than what’s being done in the U.S., according to Bloomberg. As a result, the GBTA said that it expects the Asia Pacific region to gain an additional 5 percent of market share of hotels by 2018 while the U.S. will lose 3 percent of its market share.