Corporate travel spending taking off across Asia
Like George Clooney’s character Ryan Bingham in Up in the Air, who spent hours travelling between business meetings, Asia’s corporate travellers are increasingly on the move.
According to business travel and corporate meetings organisation, Global Business Travel Association (GBTA), the Asia region now accounts for 36 per cent or US$345 billion (HK$2.68 trillion) market share of US$1.1 trillion global business travel expenditure. In China, by the end of the year, US$245 billion will be spent on corporate travel, says GBTA.
This year, mainland outbound international travel is forecast to grow 17.5 per cent, presenting challenges to airlines, hotels and other companies. If the current trend continues, GBTA predicts that next year, mainland corporate travel spending could overtake the US, the world’s leading market for business travel expenditure. Elsewhere in Asia, notably India and Indonesia, corporate travel is also on the rise.
Welf Ebeling, GBTA regional director Asia, says that over the past decade, there has been a yearly double-digit rise in business travel expenditure, fuelled by China. At the same time, he notes, many Asian companies are struggling to effectively manage the costs associated with increased business travel.
“Multinationals based in Asia usually have a travel manager in place, but the concept is relatively new to local companies,” says Ebeling. “For most companies, travel is the second largest controllable expense, but to control expenses, you must know how to manage the travel process,” he adds.
Frequently, he says, travel is considered as a non-strategic area, which often results in individual employees making their own travel arrangements. When this happens, according to Ebeling, companies with a sizable travelling workforce are missing out on the power of harnessing discounts with airlines, hotels and car hire firms. “Companies can maximise the value of their travel spending by negotiating discounts with selected travel providers based on volume and price,” he says.
Ebeling has also noted a tendency for local firms to view business travel as an employee perk, mainly for long-service employees. “Business travel should always be seen as a necessary activity to generate results,” says Ebeling, who has more than 35 years’ experience with the hotel and travel industry.
GBTA was founded in the US about 50 years ago. Last year, it established an office in Asia to support its members and provide solutions to help companies focus on their business travel management needs. For example, the GBTA Fundamentals of Business Travel Management programme is designed to offer the primary components of managed travel. Participants learn how to maximise cost containment, improve efficiency and create a managed travel culture within a company.
“As corporate travel becomes a bigger part of business expenditure, to manage the processes effectively, the role needs to be spearheaded by a professional,” says Ebeling, who notes people from the customer servicing departments of the airline and hotel industries often have the skills necessary to become travel managers.
Lily Agonoy, managing director at BCD Travel, which provides travel services including corporate travel, says effective business travel management goes beyond controlling costs. “These days there is a lot more emphasis being placed on the health, safety and security aspects of corporate travel,” she says.
The firm uses a monitoring system so it knows where clients are travelling and how to contact them. To help clients formulate travel plans, BCD also provides a weekly newsletter based on information from the World Heath Organisation and other official bodies.
“Across the region, business travel is at different stages of sophistication and maturity,” she says.
This can lead to challenges when using internet tools for making bookings and fine-tuning travel arrangements, especially involving business travel to the mainland’s third- and fourth-tier cities.
As new markets such as Myanmar open up and economies including Sri Lanka and Bangladesh expand, Agonoy says it is the job of the travel manager to ensure business travellers can manage their itineraries.
“We need to be sure people stay in hotels where they can get to meetings quickly and have access to the internet and other business facilities,” she says.
As an external service provider, Agonoy says it is important to understand clients internal travel policies and procedures.
“The role can involve managing the cost of travel, working with secretaries and personal assistants to plan travel arrangements, making last-minute travel adjustments and being aware of visa and immigration requirements,” she says.
“The goal is to keep everyone happy by meeting the business traveller’s needs balanced with their company travel policies and objectives,” Agonoy adds.