The British business travel market appears to have fallen out of step with the rest of the world
Data from the annual Travel Trends survey produced by Britain’s Office of National Statistics appear to show that Britain’s business travel sector has fallen out of step with the rest of the world.
The report summarises visits abroad by UK residents and visits to the UK by overseas residents. The latest figures show that the number of business trips made by UK residents grew modestly – up by just 7,000 to 7,156,000 in 2016, a rise of 0.1%. This falls a long way behind the historical average annual growth rate of 2.8% experienced since 1980.
At the same time, the survey reports that last year overseas residents made 9,187,000 business trips to the UK, up by 322,000 from 8,865,000 the previous year. This 3.6% growth in the number of trips is right on the long-term average.
The ONS provides historical data for the number of trips and this week’s chart looks at the trends in the number of business trips, as shown below.
What is immediately clear is that the inbound and outbound business trips were largely in step for nearly three decades from 1980 but that since the global economic crisis hit, the number of business trips from the UK has stagnated.
So what is the cause of this decoupling?
There are two likely scenarios. The first is that business travel has undergone a systemic change since 2008 and that people are travelling less on business than before. This is a possibility but given that overseas visitors have not stagnated at the same rate it seems unlikely, unless the UK is leading the charge in travel demand management and finding alternatives to travel.
The second, more likely, reason is the UK economy’s dependence on the financial services sector. The City of London generates almost 10% of the UK’s GDP. While there was a lot of talk about a cull of jobs in the City of London after 2008, this has largely not happened. What has happened is that many banks have cut back on travel. This may well explain the divergence of the UK from the rest of the world.