Corporate Travel: A focus on changing travel dynamics in Asia Pacific
As the fastest growing region in the world today, Asia Pacific has experienced a significant surge in corporate travel, with a rise of seven per cent since 20111. A variety of factors have contributed to this increase, including an improved economy and growth in infrastructure in developing markets. In fact, in China alone there are plans for 100 additional airports in the next 10 years2, enabling the country to become far more accessible to global travellers.
Moreover, according to The World Travel & Tourism Council, business travel in Asia Pacific yields a return on investment of more than 9:1. In addition, business travellers in the region confirm they are twice as likely to convert prospects into customers with an in-person meeting3, and in China, The World Travel & Tourism Council reports 38% of the economy’s share of sales relies on business travel. The importance of this is reflected in the investment the Chinese government has made to its infrastructure over the past 20 years – an incredible 8.5% of GDP4.
Given the growth in Asia Pacific, the travel industry stands to be greatly impacted by how travellers access travel reservations and the type of accommodations they choose. Amadeus, a travel sector technology leader, recently projected in its study “Shaping the Future of Travel” that Northeast Asia will account for 42% of the growth in global outbound business travel spending over the next decade, while Southeast Asia will account for an additional 13%. The study results also showed that China is quickly catching up with the United States, which is currently the largest domestic market for business travel.
As a result, online travel sites will continue to grow, especially as more people in China choose to use the internet to book their trips and accommodations instead of employing the services of travel agencies. According to a recent A.T. Kearney consumer study of China’s upper middle class, about 70% of travellers use online travel sites for information gathering, with 58% booking their accommodations on sites such as Qunar.com, E-long, booking.com and Agoda.
With more people travelling to Asia Pacific for business, reports show that companies face some real issues with culture shock. Organisations, particularly those with employees on extended-stay assignments, are finding that the day-to-day challenges employees and their families face in a new culture include, a new work environment and language barriers.
Companies interested in attracting and retaining top talent want to provide accommodations and services that will elevate the mobility experience for their relocating and extended-stay employees, while allowing them to settle in and be productive quickly. Working with an experienced, trusted housing provider who can offer the global reach, and local expertise breadth of housing options required to facilitate this transition, is part of the solution.
1 Global Report on Serviced Apartments
2 Asia Pacific Region Business Travel & MICE trends
3 US Travel Association, Business Travel Fact Sheet, http://traveleffect.com/sites/traveleffect.com/files/fact-sheets/BusinessTravel%2BCompanies.pdf, accessed 7 March 2014
4 McKinsey Quarterly, Ten forces forging China’s future, June 2013
Managing Director, APAC, Oakwood Worldwide
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