Summary:
- Volatility and uncertainty in the global economy will not dampen business growth in China, a new survey has revealed;
- The 2018 edition of the China Business Travel Barometer from CITS and American Express Global Business Travel indicates a positive business outlook from China;
- The survey shows that almost half (45%) of Chinese companies expect business travel spending to increase over the next 12 months.
The 2018 edition of the survey, a joint venture between American Express Global Business Travel and China International Travel Service, has revealed that 45% of Chinese companies expect business travel spending to increase over the next 12 months. This represents one of the strongest indicators of corporate confidence that has been reported by the Barometer since its launch 14 years ago.
Interestingly, the portion of business travel expenditure allocated to domestic China (versus international) trips has increased by 18%, compared with last year's Barometer. This indicates that the level of business activity within tier two and tier three cities in Mainland China is rising.
Research conducted by the Economist Intelligence Unit (EIU) has revealed that inland and emerging cities within China are set to outpace top tier cities in annual GDP growth over the next three years, creating attractive new business opportunities for Chinese firms.
"In addition to domestic growth, China's outbound direct investment is once again growing, indicating a focus on international business activity," says Kevin Tan, vice president, CITS American Express Global Business Travel. "Travel managers now need to ensure travel programmes and policies adequately cover the needs of travellers and companies in these new geographies."
The Barometer details the status of, as well as forecasts for, China business travel. The 2018 edition surveyed executives from over 100 companies in China, ranging from small enterprises with less than 200 employees to large companies with well above 500 staff. The organisations are spread across the major economic areas, such as Shanghai, Beijing, Guangzhou, as well as tier two and tier three cities.
The findings also reveal that 'cost savings' (62%) and 'compliance' (57%) are the top priorities for the travel programmes of Chinese companies, whereas 'safety and security' has slightly dropped from the top priority in 2017. In line with prior year results, the top three concerns on the minds of Chinese business travellers, according to the Barometer, remain: the travel reimbursement processes being too complex (49%), pre-trip validation processes being too complex (37%), and travel conditions too strict in general (37%).
"These figures highlight a clear and exciting opportunity to develop simpler and leaner processes to increase business traveller satisfaction and boost efficiency. If a company's travellers cannot understand or effectively navigate their company travel processes, there will be decreased compliance, leading to greater costs," acknowledges Mr Tan.
Considering the significant amount of change occurring in China's travel industry, both in terms of supply and demand, the Barometer also revealed 45% of Chinese travel managers believe they have limited knowledge on how to manage a travel program in current business conditions. Traditionally for many companies in China, travel budgets have focused primarily on travel servicing rather than strategic travel management, according to Mr Tan, but he explains cost-savings, governance and business efficiency, have become a greater focus for Chinese companies.
"It's critical that companies engage the right partners for their businesses in order create a travel programme that meets their evolving needs," he explains. This could range from intelligence on where China's high-speed rail can prove more efficient for domestic travel than air, as well as international guidance on visas, safety and security, and access to global travel cost-savings. "For travel managers without experience in these areas, the learning curve can be steep, so it's important to know when to outsource key business requirements," he adds.