China
is set to become the largest corporate
travel market according to Hogg Robinson Group (HRG),
the award-winning international corporate services company.
HRG’s
experts cite investment in Chinese infrastructure as one of the vital
factors in the rise of business
travel across China.
Yates
Fei, Director of Sales & Account
Management, HRG China said: “Despite a slowdown in the
speed of economic growth in China, business travel to the
region continues to increase: business travel expenditure
was $18 billion in 2000, $62 billion in 2010 and is expected to reach
$277 billion in 2020, according to the World Travel
and Tourism Council. China began investment in
infrastructure a long time ago, with particular peaks before 2008 to
accommodate demand from the Beijing Olympics, and the pace has picked
up in recent years. Figures from the GBTA suggest China will become
the world’s biggest travel market within three years; investment is
expected to continue with approximately $237 billion being spent on
infrastructure, such as airports, between 2011 and 2015. $239 billion
is committed to further develop high-speed rail tracks, directly
improving business travel in the country.”
Air
travel currently accounts for 85% of business
trips, although rail
travel is expected to rise as the ‘Ministry of
Rail’ wants high speed rail to all cities with more than 500,000
inhabitants by 2020. But as part of the Chinese government’s
commitment to improving infrastructure, new air routes have already
opened including Finnair’s service to Chongqing and Air France’s
route to Wuhan, with further routes planned. Currently, long-haul
internationaldestinations are
the least well served in China as small local airports are unable to
accommodate larger aircraft, but improvements such as lengthening
runways and the opening of secondary airports, including Chongqing
and Chengdu, will provide better options for business travellers from
outside China.
Chinese
carriers are expected to grow at an annual average rate of 8.9% over
the next 20 years, according to Boeing, in part due to the growing
internal market, but also because Chinese carriers will have the
capability and resources to compete in the tough long-haul
international market. Boeing also recently forecast that China will
need 5,260 new commercial aircraft, valued at $670 billion, over the
next 20 years. Over 75% of this demand will be for growth rather than
replacement. This growth will see Chinese carriers shaking-up the
rise of Middle Eastern ‘megacarriers’ such as Emirates, which is
on track to be at least twice the size of every other long-haul
carrier by 2015. China will become a viable and cost-effective
midpoint stop for Europe-to-Asia traffic.
China
has already made big steps to utilise travel management. The average
Chinese business traveller has embraced technology and the use
of online booking tools
or travel apps. Adoption rates are as high as 80% in some cases, as
clients are looking to streamline internal processes and mange policy
compliance. In addition, many companies are using reporting
facilities to review their travel programmes to identify potential
areas to drive further savings.
HRG’s
most recent Hotel Survey found
that the stabilised hotel rates in the established markets
of Beijing and Shanghai are evidence that the business
travel landscape in China is maturing and that infrastructure in
key areas is satisfying demand. Shenzhen, Guangzhou and Chengdu are
the fastest emerging business travel destinations in
China with the level of corporate travel growing
significantly over the past few years. These cities now have healthy
and growing infrastructure in place including international
airports and hotel chains, as well as
frequent connections to China’s international hubs to support the
increased inbound business travel.
Yates
Fei said: “The next few years will be an exciting time for the
Chinese business travel market, particularly as the
infrastructure expands to open up more of the country to both Chinese
and incoming international travellers.”
