By Anton Constantinou
As business travel markets go, China is currently the largest out there in terms of spend, having previously overtaken the US in 2015. This year alone, China business travel spend is set to hit a staggering US$30 billion, led by technological developments and rising labour costs.
According to a new report, 45% of businesses in China expect their business travel spend to rise next year, following an increase in the country’s international business activity and outbound direct investment.
Driving this growth are Tier 2 and Tier 3 cities in China which have benefitted directly from improvements to the country’s infrastructure as regards transport and housing options.
News of China’s growth comes following the announcement that business travel in Asia-Pacific is growing at twice the speed of the rest of the world, with the region set to double its corporate spending to $645 billion by 2027.
As a leading provider of serviced apartments in China, we recognise the great value this country brings to the sector and thought we’d take a look at how it’s shaking things up. Read on for four examples of…
What China is bringing to the business travel market
New luxury accommodation
With an average occupancy rate of over 75%, China remains a top priority for property operators, who are expanding their reach in the country as we speak. Operators including The Ascott, ONYX and Rosewood Hotel Group have either opened new apartments recently or have further properties on the way in the years to come.
In 2024, Rosewood will be unveiling a new Shanghai property which is set to boast an impressive 220 rooms and 83 luxury residences. A similar build by Rosewood in Shenzhen will arrive in 2022.
Meanwhile, The Ascott has partnered with the development firm, Riverside Group, who are helping to develop serviced residences in the Chinese travel cities Chongqing and Zhejiang.
A demand for serviced apartments
Right now, China is one of the most important overseas markets for the UK serviced apartment sector, with some operators witnessing as much as a 50% rise in bookings from Chinese guests. A survey earlier this year revealed that an increasing number of Chinese people are travelling for leisure purposes and, with that, investing in quality serviced accommodation in Britain.
The rise of independent Chinese travellers seeking authentic “local” experiences is partly responsible for this trend. Such travellers are drawn to the space and flexibility you get with serviced apartments, including kitchen facilities – which enable you to cook your own meals.
A focus on cost-saving and compliance
Cost-saving and compliance are two key considerations for Chinese companies offering travel programmes. An increasing number of Chinese business travellers say their travel reimbursement processes are too complex and their pre validation processes too convoluted, which has put strain on travel managers to offer simpler more efficient processes.
As Kevin Tan, Vice President of CITS American Express Global Travel notes: “If a company’s travellers cannot understand or effectively navigate their company travel processes, there will be decreased compliance, leading to greater costs.”
A growing aviation market
The Chinese aviation market is currently on course to overtake the US as the world’s biggest by 2022. In a bid to keep pace with the booming business and consumer demand for air travel, Chinese airlines are forecasted to buy some 7,700 new planes in the coming decades worth a staggering $1.2 trillion.
Under current plans, the country has ambitions to supply 20% of the world’s jetliners, and 10% of the domestic market’s commercial aircraft.
Sources
https://buyingbusinesstravel.com/news/2929516-chinese-business-travel-spend-rise
http://www.chinadaily.com.cn/a/201806/11/WS5b1deb1ba31001b82571f4da.html
https://www.chinainternetwatch.com/24495/business-travel-market-2018/
https://www.chinatravelnews.com/article/119707
https://asia.nikkei.com/Economy/Asia-Pacific-leads-global-business-travel
https://asia.nikkei.com/Business/Markets/Property/Ascott-to-boost-apartment-openings-in-China-Japan-and-Thailand
http://www.chinadaily.com.cn/a/201810/03/WS5bb480eda310eff3032809c9.html
https://www.scmp.com/business/article/2170746/chinas-aviation-industry-has-steep-climb-made-china-2025-goals
