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December 13, 2010

Singapore leads growth in business travel in Far East

Consolidation of travel management and an increase in traveller numbers are key trends.

The Asia Pacific region is seeing positive growth as business travellers take advantage of a more thriving economic climate, according to global corporate travel services company Hogg Robinson Group (HRG).  

“We have seen massive growth in volume in the region over the past year, with some areas almost reaching 2008 levels,” says James Stevenson, executive vice president of HRG Asia Pacific.

“The Asian economy was resilient through the recession, but certainly it was affected, and business travel declined there like everywhere else. But the Asian market has a business culture that respects the true value of face-to-face meetings more than any other region in the world.

“Now we are seeing increased business travel to countries such as Singapore, with second quarter gross domestic product growth figures of more than 20% (source, Business Week).”

HRG reports that it has seen a notable trend in the growth in regional bids and the consolidation of travel management into regional hubs in the Asia Pacific region. This has been demonstrated by the retention of a contract with Procter & Gamble, assisting with consolidation of its travel management into Singapore, and with the newly merged Bank of America Merrill Lynch, managing its travel across 12 countries in the region through a hub in Hong Kong.

“We understand that, for many travellers, much of Asia can represent difficult territory with strong cultural differences and, in some areas, personal security risks, but the same lessons from the rest of the world can be applied here,” Stevenson continues. “We have seen continued demand for traveller tracking tools following the Jakarta bombings, riots in Bangkok, earthquakes and the volcanic ash cloud over Europe. Travel managers are starting to recognise the importance of risk management as part of their overall travel programme and are educating their travellers about the importance of staying within the company’s travel policy.”

Infrastructure improvements
With further rapid business growth expected in the region, investment in infrastructure and connections continues to grow, according to HRG. Regional and international carriers are expanding routes and entering new markets in Asia in response to forecasts for rising traffic. HRG reports seeing many multinational companies taking advantage of new low-cost carriers, which are growing in popularity in the region. AirAsia, for example, has recently added premium services for business travelers, and is featuring increasingly in corporate travel policies.

The Formula 1 race calendar focuses international attention on Singapore, Japan and South Korea. It puts added pressure on hotel demand in the host cities. In Beijing, there is still an over-supply of rooms dating back to the Olympics, and the Shanghai Expo has brought some extra business to China’s most populous city. The $5.5 billion Marina Bay Sands development opened this year in Singapore and has provided further capacity for meetings and conference activity in the city, once again drawing attention to Singapore as a leading business destination.  

Embracing innovation
The Asia Pacific is generally a technology savvy region, according to HRG. Smartphone use is high and so mobile solutions are popular. Online booking adoption is also growing. In a keynote industry perspective to the ACTE Asia Pacific Education Conference in Singapore in August, Stevenson commented that corporate travel managers in the Asia Pacific are being asked to be more traveller-centric, and to not only allow self-service, but to actively encourage it.

"At HRG, we have identified an upward trend among our Asia Pacific clients keen on making efficiencies in the booking process,” he says. “Companies are mandating online booking tools (OBT) from outside Asia to this region and local companies are starting to see the value. Most of our clients are either closely looking at OBTs or are in the throws of piloting a roll out. We believe over the next three years, OBT booking volumes will grow exponentially in Asia as the tools, carriers and corporations evolve and adapt to the new processes around OBTs.”

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