The pandemic had a deleterious effect on global business travel spend, says a new report from Mercator Advisory Group, in its new report named ‘Commercial Credit Cards: International Markets Review and Forecast, 2020-2025’.
The report says a resurgence of credit card spending to pre-pandemic levels is not expected until 2023.
The research body said that in Latin America and the Caribbean (LAC) region, and other global markets outside of North America, spending growth remains underpinned by corporate cards, used mostly for travel and entertainment (T&E), as well as virtual cards used to settle with travel management companies.
The report states that LAC region experienced tepid economic growth leading into 2020 and activity only declined with the pandemic, as regional gross domestic product (GDP) fell by seven per cent.
It indicated that estimated overall commercial card spend in the LAC region in 2020 was US$20.4 billion, a 35.4 per cent reduction driven by the large spending gap in business travel. There was also an estimated 27 per cent reduction in credit card spend during 2020, and recovery spend in the region is projected to be flatter than some other regions of the world.
The report also said that corporate card spend declined by nearly 44 per cent in 2020. Comparably, pre-COVID growth was in the 18 per cent range, driven by central travel accounts, the report stated.
Mercator predicts improvement across the region in 2021 toward Q4, then a three-year recovery period before regaining 2019 travel levels, the report outlined.