by Suzanne Neufang
This week in Beijing, several hundred of the Asia-Pacific region’s leading corporate travel managers and industry suppliers will meet to discuss the exponential rise of business travel in that part of the world. In particular, the explosion of business travel in China presents both challenges and opportunities – not only for Chinese companies, but the vastly growing number of multi-national companies doing business there.
The fact that China has overtaken the United States as the number one business travel market in the world is surprising to many in North America. China edged past the U.S. in total business travel spending last year, and will grow the gap over the U.S. significantly in 2016 behind anticipated growth of 10 percent to more than $320 billion. In comparison, U.S. growth is anticipated to come in at less than one percent this year.
China’s impact is particularly stark on the hospitality front. More than 70 percent of new hotels under construction in the region are going up in China. The addition of all these rooms presents opportunities for multi-national programs to secure competitive rates; the massive expansion of hotel chains has even led to oversupply in some business centers. As many as four in 10 rooms have been sitting empty, so travel managers could be in a stronger position to negotiate in certain cities.
A study just released last month also stands in contrast to the procurement/cost focus that drives many North American hotel programs. A McKinsey report on Chinese business traveler preferences found that concerns about appearing “low-class,” encountering “low-quality guests,” and “not fulfilling the company image” were cited frequently as reasons for rejecting low-cost carriers and shared economy accommodation. This outlook should be kept in mind as the more NAM-based travel managers and corporate event planners put together events in China and work with local employees.
HRS has helped its corporate clients navigate this dynamically growing region for well over a decade, having opened its first office in China back in 2002. Today HRS works with thousands of travel programs and more than 100,000 hotels in the Asia-Pacific region. This week at ACTE Beijing, HRS is a platinum sponsor. CEO Tobias Ragge will host a conversation with an executive from China Mobile, examining the issues that one of the country’s largest employers (more than 500,000 employees!) has to contend with to effectively execute a well-managed travel program. It promises to be an outstanding event.
To learn more about how HRS can provide quality hotel options in Asia-Pacific and other regions with compelling discounts for North American programs, click here.