Business Travel Growth Projected to Rise Faster than Economic Growth in France in the Coming Years
All of Europe is focused on France this month as the Euro 2016 soccer tournament is underway to select a European champion. The home team has a very good shot of being crowned victors of soccer if not of economic recovery. While the nation’s economy and business travel markets are not out-performing the rest of Europe, they have both experienced respectable growth recently that is expected to continue throughout 2016 and 2017. Of course, the overall impact on Europe’s economy and business travel of the recent vote by the UK to leave the European Union is still unknown.
Despite a lingering transportation strike that is affecting both business and tourism travel throughout France, the French business travel market is forecast to continue to grow in 2016 and 2017, according to the latest GBTA Foundation Western Europe business travel forecast sponsored by Visa Inc. France is the sixth largest business travel market in the world, and its business travel sector is expected to grow at 3.9 percent in 2016 and 5.8 percent in 2017. According to the Organization for Economic Co-operation and Development, France’s economic growth is projected to rise to 1.3 percent in 2016 and 1.6 percent in 2017.
France’s increase in economic growth is largely the result of lower oil prices, less fiscal contraction and the cumulative effects of sustained monetary stimulus policies. Their business travel market, however, appears to be a harbinger of an even more positive economic future for France growing at a more rapid pace. Total business travel spending in France is set to top out at $38.6 billion USD in 2016 and $40.8 billion in 2017 – a 10 percent increase over 2015.
Even with this positive forecast, France grew at a slower rate than any other country in the Western Europe study save for Italy. A number of factors contributed to why France did not grow as rapidly as, say, the United Kingdom or Spain, but the country’s weak business confidence seems to be the main drag on France’s economic and business travel growth potential. With massive strikes over proposed labor reform laws – such as the transportation strikes mentioned previously – consumers and businesses alike are feeling less than optimistic amid growing economic uncertainties. These factors, in part, may weigh heavily on corporate investment and, subsequently, have a direct impact on business travel spending.
Even with lingering uncertainty, low consumer and business confidence and sluggish economic growth, France’s business travel market has become much healthier in recent years than it has been in the recent past. Domestic business, which accounts for 65 percent of all business travel, is projected to grow in 2016 and 2017, increasing at a rate of 3 percent and 5.7 percent, respectively. International travel is also expected to grow at a rate of around 6 percent in both 2016 and 2017. Comparing these figures to previous years when domestic travel grew by less than 1 percent in 2014 and international travel contracted by over 11 percent in 2012, and it appears that France continues to rebound from the recent economic downturn.