Saxe specifically cites significant growth in travel demand to India and China. “If you think about it, look at the world’s economy, where things are with what India has developed and what India has done compared to the rest of these places have done, and China, and that’s probably why we’ve seen these increases.”
Dismissing international flights, domestic business travel spending in the U.K., France, and Germany is expected to grow slightly in 2012 and pick up steam in 2013, according to the GBTA June report. It is expected to rise 2.7 percent in the United Kingdom in 2012, 1.1 percent in Germany, and 0.7 percent in France. In 2013, it is projected to grow 4 percent in the United Kingdom, 5.4 percent in Germany, and 5.1 percent in France.
Countries in Southern Europe will not be so fortunate. Domestic business travel spending is expected to fall by 4.1 percent in Spain and 5 percent in Italy in 2012, according to the report, for the most part as a result of austerity measures and slower economic growth rates.
This has caused the countries to implement new forms of taxation to generate more income. Last month, the Spanish government passed its 2012 budget, which includes a surprising new airport tax that is causing many airlines to add an additional fee to flights.
Many of these fees went into effect at the end of June, and apply to all travelers, even if they ordered their tickets months ago. Both Spain and Italy have announced they are raising their Value Added Tax, a consumption tax, later this summer. Spain’s will increase its tax to 21 percent from 18 percent on August 1, 2012, and Italy will increase its tax to 23 percent from 21 percent on September 1, 2012. The Spanish government also announced earlier this month that it will pass laws this month to liberalize the country’s rail, road, and air transport sector.
