Germany Continues to be Europe’s Economic Powerhouse
Germany is the largest economy in Europe, currently the third largest business travel market in the world, is led by one of the most powerful women in the world and has a strong and influential voice on both European and global affairs. Given Germany’s power, wealth and influence, it will continue to be the EU’s economic powerhouse, a title that it is unlikely to relinquish any time soon.
According to the latest GBTA Foundation Western Europe BTI Report, sponsored by Visa, spending on total business travel is expected to increase in 2016 and 2017 by 7.6 percent and 9.3 percent, respectively. These positive gains actually represent a slight downgrade in expectations from previous reports, but healthy growth is still forecast nonetheless. Of the five European countries cited in the most recent Western Europe BTI Report, Germany is expected to experience the second highest growth rate in business travel spending in 2016 while a confluence of factors will ensure that Germany’s economy continues to be the dominant force throughout the EU bloc.
Similarly, the Organization for Economic Cooperation and Development, Germany’s economy is projected to further strengthen in 2016. Due to a robust labor market, labor market reforms, historically low interest rates, low energy prices, increasing demand for Germany’s goods and services from its neighboring euro economies, and a rebounding business investment environment, business travel activity will likely remain positive for the foreseeable future, albeit at a slower pace than seen in 2015.
Given Germany’s historically low inflation, travel-related goods and service prices – such as for hotels, airfare, petro, automobile rentals, etc. – should remain relatively constant. With stable prices and predictability, consumers and corporations will likely experience travel-related cost savings further driving Germany’s business travel performance in 2016 and 2017.
Starting in 2010, spending on Germany’s domestic business travel – which accounts for 80 percent of all business travel – has experienced five straight years of growth. What was a $37.8 billion market in 2010 is projected to be a $55.2 billion market in 2016. Germany’s international outbound business travel has experienced year-over-year growth since 2012.
As Germany’s economy continues to expand in 2016 and 2017 – fueled by higher levels of exports of goods and services to other euro area countries – domestic and international outbound business travel spending will continue to expand, as well. Germany’s economic growth will help further solidify Germany’s position within both the Euro bloc and the global economy as well as within the global business travel market.