Is the BRIC Splitting? Business Travel Declines in Brazil and Russia
Two of the Four BRIC Nations Look Set for a Decline In Business Travel
The business travel markets of Brazil and Russia are in decline, threatening the BRIC bloc that looked set for great things just a decade ago.
What once looked like a group of nations set to develop at similar rates now has a very different outlook indeed according to the GBTA’s BTI Outlook semi-annual report. BRIC (a grouping acronym for Brazil, Russia, India and China, which was coined by Goldman Sachs banker Jim O’Neil in 2001) looks as though it may be splitting up, as two of the four aforementioned nations are forecast to underperform in terms of business travel.
Around 20 per cent of the world’s business travel spend is associated with China, an extraordinary figure that is up by around 5 per cent from 2000. Business travel initiated from this part of the Far East was worth around $262 billion in 2014, beaten only by the United States of America, whose spend totalled $284 billion in the same year.
It is predicted that by mid-2016, China’s business travel market will be the largest in the world. A longer term view shows that the country’s business travel market will increase by an astonishing 61 per cent over the next five years, taking their overall spend in the market to $420 billion by the end of 2019.
Recent economic uncertainty in the region has hit the market in 2015, but an increase is forecasted for 2016 and beyond.
Currently the 10th largest business travel in the world, India looks all set for breakout growth moving forward. It is predicted that the business travel market will grow by 11.5 per cent if taken as a compound annual growth rate. If this turns out to be the case, analysts predict that India will be in the top five business travel markets in the world by 2030.
The forecast for business travel across the coming year has been upgraded again following other positive signals during the end of 2014 and the beginning of this year. Short-term economic prospects for India continue to look bright, and the business travel market is currently one of the shining lights across the world.
Unlike India and China, Russia’s business travel market does not look so rosy according to GBTA. Falls of 17 per cent are expected in the region across 2015, which is a downward revision following an earlier report in the first quarter of this year. This will naturally have a knock on effect for the country’s business travel insurance market too.
There are many reasons for Russia’s downturn in fortunes, but the main protagonists are obviously the general weakness in the Russian economy, tumbling oil prices and the international sanctions being made towards to the country.
Brazil, much like Russia, looks set to underperform over the coming years when compared to what was hoped of the country just a short while ago. Although the decline will be more moderate than that of Russia, Brazil’s business travel market is still set for rocky times ahead.
Growth in this market has slowed considerably over the previous few years, and many analysts are predicting that this downward trend will continue as we move forward in to the second half of the decade. In fact, Time reports this week that BRIC has finally broken.