It is according to The Global Business Travel Association (GBTA), which released the results of its GBTA BTI™ Outlook on Brazil.
Sponsored by Visa, key highlights include:
· GBTA BTI™ has downgraded its near-term outlook for Brazilian business travel as forecasted in the first half of 2013 due to experienced volatility as a result of slower than expected, but still robust economic growth at home and abroad, particularly through June 2013
· However, Brazilian total business travel spending is forecasted to grow 6.3% in 2013 to $31.8 billion and another 12.6% in 2014 to $35.8 billion, as the global economy gains momentum along with Brazilian domestic demand
· The weaker external environment and the subsequent drop-off in trade with Europe and the U.S. have hit Brazilian international outbound business travel spending particularly hard. In 2013, international outbound business travel suffered negative growth over the first two quarters, but is expected to get back on track in 2014, advancing at a high growth rate of 12.7%
· Domestic business travel spending continues to show a strong correlation with job growth and has expanded 8.1% per year, on average, over the last 12 years. Domestic spending growth is expected to reach 7.7% in 2013 and accelerate further in 2014 as the Brazilian economy strengthens to 12.6%
· Brazil currently ranks 9th in the business travel global rankings and, assuming the high growth rate in Brazil resumes, will climb the ranks of the top business travel markets in the world surpassing South Korea, France and Italy over the next few years
Wellington Costa, President of GBTA Brazil commented: “Despite the relative volatility in Brazil, we have been encouraged by Real GDP growth and a significant rise in Brazilian export volumes. As the global economy regains double-digit growth, we remain confident that Brazilian business travel spend will return to double digit growth in 2014, this is nothing but good news.”
“Business travel to and from Brazil will continue to benefit from the country’s growing economy, as Brazil continues to be a globally important market,” said Tad Fordyce, Head of Global Commercial Solutions, Visa Inc. “According to the BTI findings, Brazil’s business travel market will surpass South Korea, France and Italy over the next few years and is projected to see double digit growth into 2014.”
Brazilian economy gathers strength
After over a year of stagnation, Real GDP will advance by 3.5% in 2013, driven primarily by domestic consumption, investment and advancing exports.
Brazilian export volumes also continued to improve in 2013 – advancing by nearly 15% over year-ago levels. The principal reasons for this welcome change in direction are improving economic conditions in the United States, further stabilization in Europe, and stronger intra-regional trade. Most experts expect Brazilian exports to continue to strengthen through at least 2014. Given the strong correlation between export activity and international outbound business travel, this is good news for travel suppliers and payment organizations.
Challenges to future growth
Sharp increases in domestic wages, slower productivity gains undermining Brazilian competitiveness and household debt deleveraging slowing the advance of private consumption, all combine to bring further challenges to Brazilian growth over the forecast horizon.
Transportation is one key area that Brazil seeks major improvement including the modernisation of ports, the expansion of airports and the repair of crumbling highways. The pace and vigor at which this infrastructure challenge is addressed is key to the health of the Brazilian business travel market over the coming years.
Brazil airport infrastructure ahead of many in the developing world
The GBTA Foundation has uncovered some interesting information that puts Brazilian business travel in a context worth sharing. The table below compares Brazilian airport infrastructure with other developing and advanced markets. The comparison suggests that Brazil is mostly ahead of other developing countries in the region and across the world. At 3.8 million population per paved airport, Brazil ranks ahead of most Latin American countries with similar spatial challenges. Moreover, Brazil is well ahead of China and India, although their higher population counts and numerous business centers pose a greater infrastructure challenge.