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Business travel spending to surge by 15.6% this year

By Wang Wen (China Daily) Updated: 2015-08-21 13:42

Business travel spending in China is expected to grow by around 15.6 percent this year to about 126 billion yuan ($19.7 billion), making it the slowest growth in the last three years, said a new report.

According to the 2015 Chinese business travel management report from iResearch Consulting Group, a Shanghai-based market analysis firm, growth in China's business travel market has bottomed out this year and the growth rate is lower than the 28.1 percent and 17.2 percent seen in 2013 and 2014 respectively.

The report said the business travel sector was hit by the global growth slowdown as many overseas companies made steep cuts to travel budgets this year.

"We have reduced our business travel budget for this year to reflect the slower economic growth," said the head of the purchase department at an European company in China, on condition of anonymity.

She said that most of the foreign companies have reduced their Chinese branches' business travel budget this year, although iResearch's report shows about 70 percent of the Chinese companies plan to expand their business travel budget.

Much of that optimism stems from China's stable macro economic prospects and growth momentum. Both these factors are expected to keep the business travel market on the growth path for the next few years, the report said. It said that the business travel market in China will reach 200 billion yuan by 2018, with a 19.1 percent year-on-year rise.

About 60 percent of the business travel from China will be to outbound destinations this year as more Chinese firms are slated to make overseas moves this year, said the report.

"Encouraged by the government's 'Belt and Road Initiative', many Chinese companies are expanding their overseas business," said Fang Jiqin, vice-president of Ctrip.com International Inc, the largest online travel agency in China.

The initiative was put forward by President Xi Jinping in 2013 and more than 60 countries along the Silk Road Economic Belt and 21 Century Maritime Silk Road trade routes as well as international organizations have shown interest in it.

Zhang Qiang, the manager of a domestic trading company, said he has already made several trips abroad this year for business expansion. "I do not know the total business travel budget of my company. But I do know for sure that my business trips have increased by 10 to 20 percent this year," he said.

Though travel demand is increasing, it is important for companies to have effective controls in place for managing business travel costs, said the report.

"Business travel costs are already a major item on expenditure budgets worldwide and China is no exception," said Hou Wentai, the general manager for Asia at US-based business travel and cost management provider Concur Technologies Inc.

To ensure the efficiency of business travel, companies must team up with business travel management providers, Hou said.

On the other hand, business travel management providers also need to improve their capacity so that they can cater to the increased demands from consumers like mobile offices and multiple payments.

The iResearch report shows that 55 percent of the companies use mobile applications to book their business travel requirements and the number of enterprises making online bookings is increasing gradually.

wangwen@chinadaily.com.cn

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